1971 (2) TMI 87 - HC - VAT and Sales Tax

Summary

Issues:
- Petitions for prohibition restraining respondent from proceeding with assessment
- Disclosure of material before action under section 16
- Authority of assessing authority under section 16 of Madras General Sales Tax Act
- Public duty of assessing authority to confer with assessee

Analysis:
The petitions sought prohibition rules against the respondent to halt the assessment process initiated through a notice issued in January 1968 for financial years 1962-63 to 1967-68. The petitioner, during an inspection, had certain materials seized by the commercial taxes department, leading to the assessment proceedings. The assessing authority under section 16 of the Madras General Sales Tax Act has the power to assess escaped turnover. The authority must have a reason for the proposal to assess, be satisfied that turnover has escaped assessment, communicate the proposal to the dealer, and provide an opportunity to show cause against the assessment. If cause is not shown, the authority can determine the turnover and assess the tax. The authority can also conduct necessary inquiries before final assessment. The section does not impose a public duty on the authority to discuss assessment details with the assessee before issuing a pre-assessment notice. The notice serves as a preliminary intimation of potential assessment due to escaped turnover, without the need for prior disclosure of assessment specifics.

The assessing authority's actions were found to be in compliance with the provisions of section 16 and the law, enabling them to proceed with the assessment. The authority had discovered incriminating materials prompting the assessment notice. Despite being called for a discussion, the petitioner did not engage with the taxing authority but opted for a writ petition. The court held that the authority had followed the required procedure and legal substance in initiating the assessment under section 16. As there was no avoidance of public duty or misuse of power by the assessing authority, the court concluded that the extraordinary writ of prohibition was not warranted. The court found no merit in the petitioner's request for a prohibition rule and, therefore, dismissed the petitions without costs.

In conclusion, the court dismissed the petitions seeking prohibition rules against the assessing authority for proceeding with the assessment under section 16 of the Madras General Sales Tax Act. The court emphasized that the authority had acted within its powers and in accordance with the statutory provisions, rejecting the petitioner's arguments regarding the disclosure of assessment details before the issuance of a pre-assessment notice. The court found no grounds to intervene in the assessment process, leading to the dismissal of the petitions.