TMI Blog1996 (7) TMI 503X X X X Extracts X X X X X X X X Extracts X X X X ..... y did not qualify for the concessional rate of tax against the "C" forms. Certain enquiries were made by the Assessing Authority about the genuineness of those "C" forms given by the six Bombay dealers and, consequently, 14 "C" forms were treated to be not genuine. Sales made to those six Bombay firms against the aforesaid 14 "C" forms amounting to Rs. 27,20,079.35 were treated to be ineligible for the concessional rate of tax. Therefore, tax at the rate of 10 per cent instead of 3 per cent was charged. The assessee-firm went in appeal before the Deputy Excise and Taxation Commissioner as well as the Tribunal failed. The plea of the petitioner was that the "C" forms in question were valid and genuine declarations and had been obtained from genuine purchasing dealers of Bombay. The assessee's plea, however, was not accepted and the levy of tax at the higher rate was upheld. The assessee sought the following three questions for reference before the Tribunal: 1.. Whether, on the facts and in the circumstances of the case, the Sales Tax Tribunal, Punjab, was justified in law in affirming the action of the Assessing Authority in refusing to treat the sales to the extent of Rs. 23,06 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... each case in the assessment order. Sales amounting to Rs. 5,13,845 to M/s. A.A. Diwakar and Sons, Bombay, were not accepted to be eligible for concessional rate of tax because enquiries made from Bombay had revealed that there was no such firm in the name and style of M/s. A.A. Diwakar and Sons. Sales made to M/s. Premier Sales Company, Bombay, were also not accepted to be genuine inter-State sales on the ground that, on enquiries from the sales tax authorities of Bombay, it was noticed that the registration certificate issued to the purchasing dealer had been cancelled from December 17, 1969. Therefore, "C" forms issued in the year 1972-73 were held to be not genuine. Similarly, sales made to M/s. Shah Trading Corporation, Bombay, were also treated likewise because the Assessing Authority, after enquiries made from the sales tax authorities of Bombay came to know that no actual purchase had been made by that dealer from the assessee. A copy of the affidavit filed by Shri Laxmi Dass Manchubhai Shah revealed that he used to issue accommodation bills to brokers and financiers on receipt of some petty remuneration. The Assessing Authority, therefore, took the view that the purchasin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs had been cancelled by the sales tax authorities of Bombay. The assessee could not be punished for any wrong done by the purchasing dealers. The learned counsel for the assessee has placed reliance on certain decisions which are discussed hereinafter. In Suresh Trading Company v. State of Maharashtra [1981] 48 STC 207, the Bombay High Court had laid down that cancellation of registration certificate with retrospective effect could not be used to levy tax retrospectively on some one else. Karnataka High Court in Sri Mahalakshmi Trading Company v. Commissioner of Commercial Taxes in Karnataka [1984] 57 STC 53, examined a case where certain material had been collected by the assessing authority from a third party. It was observed that if any such material was to be used against the assessee, that must be brought on record in the assessment proceedings in accordance with law. The Allahabad High Court in Mahboob Singh Subhash Chand Arhati v. Commissioner, Sales Tax, U.P., Lucknow [1988] 69 STC 229, was examining a matter where entries made in the books of account of a third party were pressed into service to make a reassessment. It was observed that the assessing authority had a dut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ples of natural justice in reaching their conclusions. Although a taxing officer is not fettered by technical rules of evidence and pleadings and is entitled to act on materials which may not be accepted as evidence, in a court of law that does not absolve him from the obligation to comply with the fundamental rules of justice which have come to be known in the jurisprudence of administrative law as principles of natural justice. However, principles of natural justice are not constant, they are not absolute and rigid rules having universal application. The learned counsel for the assessee-firm, deriving strength from the aforesaid judicial pronouncement time and again argued that it was a case where the Assessing Officer did not have any material whatsoever which could be treated as evidence in law against the assessee. It was necessary, before arriving at an adverse conclusion against the assessee, that the material so collected was made available to the assessee. Since it has not been so done, the entire exercise is said to be totally invalid, based on no legal evidence. The learned counsel for the respondent-State, in reply, argued that the questions incorporating the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Tribunal, after examining each case, found it appropriate to remand the matter in respect of sales made by the assessee to M/s. A.A. Diwakar and Sons, Bombay. The other five transactions were found to be not genuine on the basis of the material on record. This is said to be a finding of fact by the Tribunal that the discrepancies had been duly confronted to the assessee. The assessee did not think it proper to seek remand order by raising a specific plea in this behalf for all the transactions made to all the six Bombay firms. The learned counsel for the respondent-State has placed reliance on a decision of the Supreme Court in State of Madras v. Radio and Electricals Ltd. [1966] 18 STC 222, wherein it has been observed that, as per the scheme of the Central Sales Tax (Registration and Turnover) Rules, 1957, read with the Central Sales Tax Act, 1956, the purchasing dealer as well as the selling dealer must register themselves under the Central Sales Tax Act. If the certificate is defective in that it does not set out all the details, or that it contains false particulars about the order, bill, cash memo or challan, or about the number and date of the registration certificate a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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