TMI Blog1978 (1) TMI 160X X X X Extracts X X X X X X X X Extracts X X X X ..... nufacturers like that of the petitioner were also exempt from payment of sales tax and in the case of Messrs. S. Zoraster and Company, Jaipur, the Additional Commissioner, Commercial Taxes, Rajasthan, Jaipur, determined the question in case No. 23(56)M/ST/156, vide judgment dated 22nd November, 1966, that the woollen fabrics were subject to levy of additional excise duty under the Additional Duties of Excise (Goods of Special Importance) Act, 1957, and the woollen felt manufactured and sold by Messrs. S. Zoraster and Company was covered by entry 18 of the Schedule appended to the Rajasthan Sales Tax Act, 1954, and, on the basis of this judgment, Messrs. S. Zoraster and Company and the other similar woollen felt manufacturers were being treated as exempt from payment of sales tax both under the Rajasthan Sales Tax Act and the Central Sales Tax Act. That Messrs. S. Zoraster and Company, dealing in similar products as that of the petitioner, filed a writ petition before the Division Bench (No. 1663 of 1972) of this Court alleging that the woollen felt manufactured by them was not woollen fabric and that the Central excise authorities were not entitled to charge any excise duty on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ari Udyog Mandir, Falna, District Pali v. State of Rajasthan(1972) VI T.R. 202. and Bhikkilal Chhotey Lal v. State of Rajasthan1967 R.R.D. 228. It was also urged that the assessing authority did not have the jurisdiction under section 12 of the Rajasthan Act to issue notices because it had no reason to believe that the sale was under-assessed and such underassessment has occurred by reason of either omission or failure on the part of the assessee to make a return to clearly disclose the sale, or omission or failure on the part of the assessee to disclose fully and truly all material facts necessary for its assessment. As both these conditions are conditions precedent to be satisfied before the assessing authority can have jurisdiction to issue a notice for reassessment, in the absence of the same, notices issued are without jurisdiction. The assessee had clearly indicated the entire turnover in the return filed by it, and the assessing authority, after taking into consideration all the materials on record, granted exemption and held that the sale regarding the woollen felts was free from tax. The learned counsel urged that section 34 of the Income-tax Act has provided the pattern f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tional Clinic v. Assistant Commercial Taxes Officer, Sri Ganganagar1966 R.L.W. 257. , was held to be not laying down the good law in view of the other Supreme Court decisions by a Division Bench of this Court in Akbarali Amanatali v. Assistant Commercial Taxes Officer1976 W.L.N. 815., the cases, relied upon by the petitioner, cannot be of much avail to him. The question whether woollen felt is woollen fabric or not stands conclusively determined by the decision of their Lordships of the Supreme Court in Union of India v. Gujarat Woollen Felt Mills A.I.R. 1977 S.C. 1548. A.I.R. 1959 S.C. 1303. The decision of this Court in S. Zoraster Co. v. Union of India A.I.R. 1976 Raj. 190. was based on the decision of the Gujarat High Court in Union of India v. Gujarat Woollen Felt MillsSpecial Civil Application No. 112 of, which was upheld by the Supreme Court in the above-noted decision and it was held that: "Non-woven felts, manufactured from woollen fibres by machine pressing of raw wool-waste, which were neither sheets nor fabrics and utilised for the purpose of filtration in heavy industries, are not 'woollen fabrics' within the meaning of entry 21 in Schedule 1 to the Act, read as a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss or such registration fee or exemption fee a notice in the prescribed form and may proceed to assess or reassess the amount of the tax or levy the correct amount of registration fee or exemption fee from such dealer: Provided that if a Deputy Commissioner (Administration) has reason to believe that the whole or any part of the business of a dealer has escaped assessment to tax or has been under-assessed or has been assessed at too low a rate, he may at any time subject to the time-limit specified in sub-section (2), either direct the assessing authority to assess or reassess the amount of tax or himself proceed to assess or reassess the tax. Explanation.-Nothing in this section shall be deemed to prevent the assessing authority from making an assessment to the best of his judgment. (2) No notice under sub-section (1) shall be issued in respect of any business, registration fee or exemption fee for any year after the expiry of eight years from the end of the relevant assessment year: Provided that nothing contained in this sub-section shall apply to any assessment or reassessment made in consequence of, or to give effect to, any finding or direction contained in an order u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt in S. Zoraster and CompanyA.I.R. 1976 Raj. 190. and in view of the authoritative pronouncements by their Lordships of the Supreme Court in Union of India v. Gujarat Woollen Felt MillsA.I.R. 1977 S.C. 1548., it cannot now be said that the woollen felt manufactured by the petitioner is woollen fabric. The assessing authority has come to know about this true position of fact and law after the original assessment and in consequence of such information, it can be very well said that he has reason to believe that the turnover has escaped assessment of sales tax. The information can be of fact or of law. The fact that the Income-tax Officer, with due diligence, could have obtained the information or could have come to a right conclusion during the previous assessment on a proper investigation of the material, would not go to hold that he does not have reasons to believe that the turnover has escaped assessment. In R.K. Malhotra v. Kasturbhai Lalbhai[1977] 109 I.T.R. 537 (S.C.); A.I.R. 1977 S.C. 2129., the question arose for consideration whether the information which the Income-tax Officer received from the audit department be construed as an information within the meaning of section 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xus with the formation of reason regarding escaped assessment and not granting of exemption and the assessing authority is clothed with the jurisdiction to take action under section 12(1) of the Rajasthan Act. Whether the grounds are adequate or not is not a matter which can be gone into by this Court, for the sufficiency of the grounds, which induced the assessing authority to act, is not a justiciable issue. There is nothing to hold that the belief of the assessing authority is not formed in good faith and is a mere pretence for initiating action under section 12 of the Act. The assessing authority, in the circumstances, in our opinion, acted within the ambit of its power in initiating the proceedings under section 12 of the Rajasthan Act. This writ petition is also liable to be dismissed on the ground of alternative remedy. The Rajasthan Sales Tax Act provides for a complete machinery and the recourse must be had to that machinery for redress and not by a petition under article 226 of the Constitution. It is not the object of article 226 of the Constitution to convert this Court into an original or assessing authority. Whenever an assessee chooses to attack an assessment or a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s for belief before the assessing authority itself. Their Lordships in that case held as under: "While the High Court previously had the freedom to issue a high prerogative writ notwithstanding the existence of an alternative remedy, it is now precluded from doing so because article 226(3) provides, 'no petition for the redress of any injury referred to in sub-clause (b) or sub-clause (c) of clause (1) shall be entertained if any other remedy for such redress is provided for by or under any other law for the time being in force'." With these observations, their Lordships dismissed the writ petition pending before them. In Delhi Cloth and General Mills Co. Ltd. v. R. R. Gupta, Commercial Tax Officer, Jaipur[1976] 38 S.T.C. 113 (S.C.); A.I.R. 1977 S.C. 2086. , the petitioner asserted that from the years 1966 to 1969, the respondentCommercial Taxes Officer was not subjecting the goods of rayon tyre cord fabric to sales tax and accepted the case of the petitioner that they were exempt from taxation. Thereafter, some questions were put in the Rajasthan State Legislative Assembly on or about 20th April, 1971, asking for the reasons why those goods were exempt from sales tax. The Co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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