TMI Blog1988 (2) TMI 430X X X X Extracts X X X X X X X X Extracts X X X X ..... has two factories, one in West Bengal and another in Tamil Nadu. The company purchases natural rubber from Kerala and despatches the same to its factories in West Bengal and Tamil Nadu for use in its manufacturing process. According to the petitioner the purchase turnover of rubber was subjected to tax under section 5A(1)(c) of the Kerala General Sales Tax Act and assessed as per the impugned orders of assessment. The petitioners in the O.P. have challenged the validity of section 5A(1)(c) of the Act as unconstitutional and beyond the competence of the State Legislature for the reason of entry 92B of List I of the Seventh Schedule of the Constitution. Rubber cess according to the petitioners cannot form part of the taxable turnover of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .. The only other contention raised by the learned counsel for the assessee is against the arbitrary estimate of rubber cess paid as in violation of the principles of natural justice. The assessee has no objection to the taxable turnover determined except as regards rubber cess. Exhibits P1(a), P1(b), P1(c) and P1(d) are the pre-assessment notices, proposing estimate of rubber cess as equal to the purchase value of rubber during the assessment years in question. These notices require the assessee to file objections to the pre-assessment notice within seven days from the date of receipt of the same. Exhibit P1(a) is dated 20th January, 1984 and the same was received by the assessee on 24th January, 1984. Exhibits P1(b) and P1(c) are dated 24 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that the cess payable up to August, 1975 was at the rate of Rs. 300 per ton and from September 1975 at the rate of Rs. 400 per ton. In paragraph II of the O.P. the petitioners have stated that the rate of cess payable under the Rubber Act is fixed by notification issued by the Central Government and it was fixed initially at 30 Ps. per kilogram of rubber and was later enhanced to 40 Ps. per kilogram. The estimate of rubber cess as equal to the purchase value of rubber is to say the least arbitrary. The orders of assessment exhibits P4(a), P4(b), P4(c) and P4(d) are therefore unsustainable in so far as they relate to the estimate of rubber cess for the reason of its arbitrary nature and also for violation of the principles of natural just ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax under a valid Act was open to challenge under article 32 on the ground of misconstruction of the Act or a notification under it. It was held that the answer was in the negative. That case has given some trouble in view of the different opinions expressed in it. It is therefore necessary to state simply the propositions which are settled by this court. The ruling recognises the existence of a right to move this court under article 32 where the action is taken under an ultra vires statute, or where, although the statute is intra vires, the action is without jurisdiction or the principles of natural justice are violated. Errors of law or fact committed in the exercise of jurisdiction founded on a valid law do not entitle a person to have th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inciples of natural justice in reaching their conclusions. It is true, as pointed out by this Court in Dhakeswari Cotton Mills Ltd. v. Commissioner of Income-tax, West Bengal [1955] 1 SCR 941; AIR 1955 SC 65, that a taxing officer 'is not fettered by technical rules of evidence and pleadings, and that he is entitled to act on material which may not be accepted as evidence in a court of law', but that does not absolve him from the obligation to comply with the fundamental rules of justice which have come to be known in the jurisprudence of administrative law as principles of natural justice." 8.. On the facts of the case, it is clear that even before the time granted for filing objections to the pre-assessment notices had expired, the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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