1984 (1) TMI 300 - HC - VAT and Sales Tax

Summary

Issues:
Assessment under Punjab General Sales Tax Act, 1948; Validity of original assessment order; Effect of remand order on original assessment; Entitlement to tax refund after quashed assessment.

Analysis:
The petitioner-firm, engaged in resale of karyana and foodgrains, filed quarterly returns for the assessment year 1961-62 and paid tax. The Assessing Authority enhanced the gross turnover, disallowed sales, and imposed a penalty, creating additional demand. The revising authority remanded the case for scrutiny, directing a clear finding on transactions and rates. After remand, a new assessment was made, fixing gross turnover, allowing certain sales, deductions, and refunding excess tax. An appeal quashed the original assessment due to lack of notice, which was upheld in revision. The petitioner sought a tax refund after the assessment was quashed.

The key question was whether the remand order effectively set aside the original assessment and if the subsequent assessment substituted the original. The revising authority's order implied modification of the original assessment based on scrutiny outcomes. The subsequent assessment altered the tax liability, indicating substitution of the original assessment. Legal precedents highlighted that a fresh assessment post-remand acts as a second assessment, not bound by the original findings but governed by directions from the revising authority. The court agreed with these principles.

Therefore, the court answered the question in favor of the assessee, stating that the subsequent assessment post-remand effectively substituted the original assessment. The petitioner was entitled to a tax refund due to the quashed assessment. The court awarded costs to the assessee and concluded the reference in the affirmative.