1960 (3) TMI 34 - HC - VAT and Sales Tax

Summary

Issues:
- Petition under Article 226 and 227 to quash notices and seek prohibition on best judgment assessment of sales tax for specific financial years.
- Legality of Assessing Authority's notices for best judgment assessment under section 11(4) of the Sales Tax Act.
- Entitlement of petitioners to extraordinary legal remedies of certiorari and prohibition.
- Jurisdiction of Assessing Authority to issue notices and make best judgment assessment after the expiry of three years from the relevant financial years.

Analysis:
The petitioners, cloth merchants registered under the Sales Tax Act, sought to quash notices and prohibit best judgment assessment for the financial years ending 31st March, 1955, and 31st March, 1956. The Assessing Authority issued notices calling for accounts, warning of best judgment assessment under section 11 of the Act if the petitioners failed to comply. The petitioners contended that best judgment assessment after three years from the relevant financial years was impermissible. The respondent, Excise and Taxation Officer, argued against the extraordinary remedies sought by the petitioners, asserting no bar to assessment completion after the specified three-year period under section 11(4) of the Act.

The court held that the petitioners should resort to ordinary remedies provided by the Act and were not entitled to certiorari or prohibition. Noting that no assessment had been made under section 11(4) yet, the court found no illegality in the notices issued by the Assessing Authority. The court emphasized that the petition seemed premature and misconceived, as no best judgment assessment had been initiated. The petitioners were advised to await the ordinary remedies under the Act if and when an assessment was made. The court cited precedents to support its stance and dismissed the petition on the grounds that the extraordinary legal remedies were not warranted in this case and the petition was premature.

The court also addressed the issue of whether the Assessing Authority could issue a final assessment order under section 11(4) after the three-year period from the end of the relevant financial year. While indicating no apparent bar to initiating proceedings within the three-year timeframe, the court refrained from giving a final opinion on the matter. Ultimately, the court dismissed the petition, ruling that the petitioners were not entitled to the extraordinary legal remedies sought and that the petition was premature. The respondent was awarded costs, including counsel fees.

In conclusion, the judgment focused on the petitioners' premature invocation of extraordinary remedies, the legality of the Assessing Authority's notices, and the permissibility of best judgment assessment after the prescribed three-year period. The court emphasized the availability of ordinary remedies under the Act and dismissed the petition on the grounds of prematurity and lack of entitlement to extraordinary legal remedies.