1995 (12) TMI 356 - HC - VAT and Sales Tax

Summary

Issues:
1. Validity of section 38-A(2) of the M.P. General Sales Tax Act, 1958.
2. Quashing of the order demanding security of Rs. 10,00,000 and cancellation of registration under the Sales Tax Act.
3. Direction to furnish requisite information for assessing taxing liability.
4. Quashing of the notice for assessment.

Detailed Analysis:
1. The petitioner challenged the validity of section 38-A(2) of the M.P. General Sales Tax Act, 1958, along with the orders demanding security and cancellation of registration. The petitioner argued that the security demand was unjustified as they had filed the required return and paid the tax due. The court examined the provisions of section 38-A and held it valid based on a previous case precedent. The court found that the conditions for appeal and deposit of security under section 38-A were similar to those under section 38 for tax payment, upholding the validity of the section.

2. The court analyzed the order demanding security of Rs. 10 lakhs and cancellation of registration. It was noted that the authority's jurisdiction for imposing penalties arises when the dealer fails to file returns or pay taxes on time. The petitioner had filed the return within the stipulated time, as per the rules, and had paid the tax due. The respondents had admitted receiving the return but alleged concealment of income. The court found that since the return was filed on time, there was no basis for demanding security or cancelling registration. The court quashed the orders demanding security and registration cancellation.

3. The petitioner requested the respondents to provide all relevant information for assessing taxing liability, including records from Krishi Upaj Mandi. The court held that under section 18 of the Act, the Commissioner is obligated to provide the dealer with necessary documents and summon required records for assessment. The court directed the respondents to make all relevant records available to the petitioner and summon the Krishi Upaj Mandi records as requested.

4. The court addressed the issue of quashing the notice for assessment. The petitioner sought to challenge the assessment notice, arguing that they had fulfilled their obligations by filing returns and paying taxes. The court's decision to quash the orders demanding security and registration cancellation also indirectly addressed the issue of the assessment notice. The court allowed the petition in part, quashing the relevant orders and directing the respondents to provide necessary information for assessment purposes.