TMI Blog1998 (7) TMI 669X X X X Extracts X X X X X X X X Extracts X X X X ..... ade out of such purchases of iron and steel for Rs. 1,54,750 and as first seller, he is liable to pay tax. 3.. Pursuant to the inspection of the business premises of the petitioner by the respondents, the respondents issued a notice dated November 25, 1991 to the petitioner requiring the petitioner to pay a tax of Rs. 11,198 and to offer his explanation if any, on the question of irregularities noticed by them and further indicating that the department is willing to compound the offence if the petitioner desires to do so. Though the petitioner paid the tax of Rs. 11,198 along with the compounding fee of Rs. 22,396, this writ petition is filed invoking the extraordinary jurisdiction of this Court under article 226 of the Constitution of India seeking a mandamus or any other appropriate direction declaring the action of the respondents in collecting Rs. 11,198 towards tax without passing any assessment order and also collection of an amount of Rs. 22,396 towards compounding fee as illegal, arbitrary and a further direction is also sought directing the respondents to refund the said amount or in the alternative to declare the collection of fees to the extent of Rs. 19,396 as excessi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 32(1)(a) or 32(1)(b) of the Andhra Pradesh General Sales Tax Act, 1957, enabling the respondents to compound the offence? 6.. In so far as the first question is concerned, it is submitted by Sri K. Raji Reddy, counsel for the petitioner, that the officials of the Vigilance and Enforcement have no power to demand tax from the petitioner-firm inasmuch as when tax is demanded, there shall be an assessment order preceding the demand and also a notice requiring payment of the demanded amount. Learned counsel further stated that the authorities prescribed under section 28 of the Act have only power to inspect but have no power to assess the tax liability as they are not the assessing authorities within the meaning of section 28 of the Act. Even otherwise, it is contended that before assessing the tax liability, an order has to be passed and notice requiring the payment of tax has to be preceded prior to issuance of demand notice. Counsel contended that the notice dated November 25, 1991 issued by the respondents is a demand notice and without there being an assessment order preceding the demand notice dated November 25, 1991, such notice is illegal and is liable to be set ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... partner had volunteered to pay the tax of Rs. 11,198 as proposed by the first respondent and also offered to get the offence compounded by paying an amount of Rs. 22,396, by any stretch of imagination, it cannot be said that the notice dated November 25, 1991 is a demand notice. When the notice dated November 25, 1991 is not a demand notice, the question of an assessment order preceding the demand notice does not arise at all. 10.. The decisions cited by the learned counsel for the petitioner have no bearing on the facts and circumstances of the case on hand. In the two decisions cited by the learned counsel, demand notice was issued to the parties and without giving any opportunity to the parties, tax was sought to be collected. However, in the instant case, the notice dated November 25, 1991 was issued to the petitioner-firm proposing to levy a tax of Rs. 11,198 on the suppressed sales made by it and also proposing to compound the offence. Through the said notice, time up to November 30, 1991 was given to the petitioner-firm for filing any explanation or objections, if any. However, the managing partner of the petitionerfirm has volunteered himself to pay the tax of Rs. 11,198 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... falls under section 32(1)(b) of the Act as contended by the learned counsel for the petitioner or under section 32(1)(a) of the Act as contended by the learned Special Government pleader. 15.. The impugned notice dated November 25, 1991 issued to the petitioner by the first respondent makes it clear that the petitioner has fraudulently evaded taxes and wilfully failed to issue sale bills/cash memorandums. In the counter filed by the respondents, it is stated that the Vigilance and Enforcement District Task Force, Nellore, on inspection of the petitioner's premises found one diary and two slips and on verifying the said material, it is found that though the petitioner-firm effected certain sales of furniture, etc., to a tune of Rs. 1,56,610. but the same have not been shown or accounted for in account books. Therefore, it is apparent that the petitioner-firm has wilfully made an attempt to evade payment of tax and in that process suppressed the turnover of Rs. 1,56,610. Thus, the action of the petitioner-firm in suppressing the turnover amount of Rs. 1,56,610 is only intended to evade payment of tax on the said amount and would tantamount to evasion of tax attracting the provisio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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