TMI Blog1995 (3) TMI 442X X X X Extracts X X X X X X X X Extracts X X X X ..... notice was illegal as it was issued without application of mind, that the petitioner was not supplied copy of the report of the Flying Squad and was denied opportunity to effectively meet the case of the department. Assessment was completed by order dated February 24, 1989, levying penalty of Rs. 24,000 under section 43(1) for alleged concealment of turnover and submission of false return. Assessment was completed long after period of limitation under section 18 of the Act was over. This was done on account of extension of time granted under notification dated December 26, 1988, which is challenged as illegal since the notification is ultra vires the powers of the State Government. On the basis of the above submissions, the petitioner contends that the notice and assessment are liable to be quashed. The further contention is that section 38(3)(c) of the State Act is arbitrary and unconstitutional as also the notification dated December 26, 1988. Similar are the contentions of the petitioners in other writ petitions. On behalf of the respondents, return has been filed. 3. Learned counsel for the petitioners submitted that though the petitioners did not file appeals against asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under the said section, one half of such balance; and (e) in any other case, one-fourth of such balance; is paid and the memorandum of appeal is accompanied by a satisfactory proof of payment of such amount and thereupon the appellate authority shall stay the recovery of the balance of tax and/or penalty till the decision of appeal: Provided that where a dealer is covered by more than one of the aforesaid clauses, the provisions of the clause requiring the payment of the highest amount, shall apply to such dealer and the first or the second appeal shall be admitted only after he has paid such amount." In order that first and second appeal be admitted, it is obligatory for the appellant to pay a part of the balance of the tax or penalty payable under the order impugned. According to sub-clause (c) which is attracted in these cases, appeal cannot be admitted unless 50 per cent of the balance amount is paid and the memorandum of appeal is accompanied by satisfactory proof of payment. Thereupon, the appellate authority shall stay recovery of balance and/or penalty till the decision of the appeal. Constitutionality of section 38(3)(c) is under challenge. 5.. Section 43 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... requiring that authority or body to observe principles of natural justice and make a speaking order, etc.; the last mentioned factor particularly ensures application of mind on the part of the authority or body only to pertinent or germane material on the record excluding the extraneous and irrelevant and also subjects the order of the authority or body to a judicial review under the writ jurisdiction of the court on grounds of perversity, extraneous influence, mala fides and other blatant infirmities. Moreover all these factors will have to be considered in the light of the scheme of the enactment and the purpose intended to be achieved by the concerned provision." The court noticed that power in that case was required to be exercised by a responsible body in an objective manner, the power being quasi-judicial power implied that it be exercised only after observing principles of natural justice and the requirements of passing of speaking order implied giving reasons which ensured consideration of only germane or other materials. On these grounds, the court sustained the vires of the impugned provision. 7.. Learned counsel for the petitioners placed strong reliance on the deci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sioner of Sales Tax [1955] 6 STC 222 where challenge against section 22(1) of the Sales Tax Act was repelled. The provision imposed a condition of payment of tax with penalty, if any, before appeal is admitted. The court held that a person has no inherent right of appeal, that the right which is a creature of the statute and is therefore subject to conditions and restrictions imposed on it and it is open to Legislature to give or not to give a right of appeal against decisions made by the authorities under the Act. 10.. A Full Bench of the Kerala High Court in Sundari Bai v. State of Kerala AIR 1979 Ker 68, at paragraph 13 considered and upheld a similar provision in the Kerala Building Tax Act. 11.. In Anant Mills Co. Ltd. v. State of Gujarat AIR 1975 SC 1234, the court upheld the constitutionality of a statutory provision which barred entertainment of an appeal unless the amount demanded from the appellant has been deposited by him. The provision contained a proviso enabling the Judge to mitigate hardship in appropriate cases. The Supreme Court held in paragraph 40 that the requirement of deposit of the amount is a condition precedent for the entertainment of the appeal and h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ictions rendering the right almost illusory......... Counsel for the appellants, however, urged that the conditions imposed should be regarded as unreasonably onerous especially when no discretion has been left with the appellate or revisional authority to relax or waive the condition or grant exemption in respect thereof in fit and proper cases and, therefore, the fetter imposed must be regarded as unconstitutional and struck down. It is not possible to accept this contention for more than one reason. In the first place, the object of imposing the condition is obviously to prevent frivolous appeals and revision that impede the implementation of the ceiling policy secondly, having regard to sub-sections (8) and (9) it is clear that the cash deposit or bank guarantee is not by way of any exaction but in the nature of securing mesne profits from the person who it ultimately found to be in unlawful possession of the land; thirdly, the deposit or the guarantee is correlated to the land holdings tax (30 times the tax) which, we are informed, varies in the State of Haryana around a paltry amount of Rs. 8 per acre annually; fourthly, the deposit to be made or bank guarantee to be furnishe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provision is regulatory in nature and is not oppressive or arbitrary. Point No. (ii): 15.. Section 18 of the State Act deals with assessment of tax. Sub-section (8) of section 18 prescribes the period within which assessment is to be made in different cases. Clause (i) of sub-section (8) which is relevant for the purpose reads thus: "8. The assessment shall be made under this section (i) in respect of registered dealer and a dealer referred to in clause (b) of sub-section (6), within a period of two calendar years from the end of the period for which assessment is to be made." Proviso (a) requires that where a fresh assessment has to be made to give effect to any finding or direction contained in any order under sections 38, 39 or 44 or to any order of any court, the assessment shall be made within a period of two calendar years from the date of the order containing such finding or direction or the order of any court; and in case fresh assessment is not made within the specified period, the Commissioner shall take steps to ensure that assessment is made as expeditiously as possible. 16.. By M.P. Ordinance No. 10 of 1988, sub-section (9) has been substituted. Sub-section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... On a reading of sub-section (9), it is not possible to accept that the Legislature has conferred on the State Government unbridled and uncanalised discretion to extend the period for any irrelevant reason. Sub-section (9) of course does not contain express guidelines but the scheme of the provision contained in sub-sections (8) and (9) and the language of subsection (9) clearly spell out guidelines. The Government while acting under subsection (9) must have regard to the mandate of sub-section (8) regarding early or expeditious completion of assessment. It must also consider whether assessment proceedings cannot be completed, within the period and if it decides to extend the period, must record reasons. The word "reason" connotes a statement of fact as would reasonably justify the conclusion [see Garg Trading Co. v. Sales Tax Officer (1983) 16 VKN 10]. Conclusion is a judgment arrived at by reasoning, inference or deduction. The reason must be relevant and must have foundation. It must be connected with the inability to complete the assessment as can be spelled out from the words "cannot be completed". It is, therefore, clear that guidelines in the matter of exercise of statuto ..... X X X X Extracts X X X X X X X X Extracts X X X X
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