TMI Blog2000 (4) TMI 800X X X X Extracts X X X X X X X X Extracts X X X X ..... fixed rate of 24 per cent per annum on the quantum of tax remaining unpaid on assessment or reassessment. 4.. The relevant facts in brief leading to the passing of the impugned orders of provisional assessment are as under: 5.. Admittedly, one of the business activities of the petitioner-company is to manufacture air-conditioning package units. The petitioner-company has its factory at Udhna. For the assessment years in question it had transacted business of erection of air-conditioner units within the State of Gujarat, outside the State and in the course of inter-State trade and commerce. 6.. The case of the petitioner-company is that air-conditioning package units are manufactured according to the specification of its customers. The company has several branches in the country including one at Ahmedabad and one at Calcutta. The case of the company is that airconditioning package units manufactured by it at its factory at Udhna are dispatched by it to its branches at Ahmedabad and/or Calcutta by way of branch transfers. Such supply of air-conditioning package units, according to the petitioner-company to the customers outside the State were not sales but were inter-State work ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her transactions are to be assessed under section 41(3) and the transactions assessed under section 41B are to be allowed as deduction at the time of assessment under that section." [The above quoted portion is English translation from the order in Gujarati] 10.. The assessing officer thus treating branch transfers as sales in the course of inter-State works contract provisionally assessed the petitioner and imposed on it tax, interest and penalty in different amounts for the different periods in question. 11.. The learned Senior Counsel Shri Kaji appearing for the petitionercompany challenges the impugned orders of provisional assessments and raises question of vires of section 47(4A)(b) of the State Act. The main ground urged is that in absence of any amendment to the definition of "sale" in the Central Sales Tax Act after introduction of definition clause (29A) in article 366 of the Constitution, the assessing authority could not have subjected inter-State works contract to tax treating them as inter-State sales merely because after insertion of clause (29A) in article 366 of the Constitution, definition of "sale" in the State Act was substituted by Gujarat Act No. 14 of 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not exist any facts, circumstances or grounds for the assessing authority to invoke the power of making provisional assessment under section 41B of the State Act. For the aforesaid reason, which we would shortly elaborate, we do not consider it necessary to decide the other legal and constitutional issues raised on behalf of the petitioner-company. We grant the company liberty to raise all such grounds in its regular assessments pending under section 41 of the State Act. 17.. Section 41B providing for provisional assessment reads as under: "41B. Provisional assessment.-(1) Where the Commissioner has reason to believe that the dealer has evaded the tax, he may, after taking into account all relevant materials gathered by him and after giving the dealer a reasonable opportunity of being heard, provisionally assess to the best of his judgment the amount of tax payable by the dealer. (2) The provisions of this Act shall mutatis mutandis apply to the provisional assessment as if provisional assessment were an assessment made under this Act." (Underlining to invite pointed attention and for emphasis) 18.. A bare perusal of the abovequoted provision would go to show that resort ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... law has been trying to avoid payment of tax in due time. 21.. We seek some support in taking the aforesaid view of the provisions of section 41B of the Act from the division Bench decision of this Court in Natraj Rubbers v. Sales Tax Officer, Bhavnagar [1999] 113 STC 575, where the similar word "evasion" used in section 62 of the Act was construed denoting "some overt or covert act on the part of the dealer in furtherance of avoiding or to evade the tax". 22.. The petitioner-company has contended before the department that all its branch transfers outside the State were transfers in the nature of inter-State works contracts and in absence of the amendment of the definition of "sale" in the Central Sales Tax Act, after introduction of clause (29A) in article 366 of the Constitution, such inter-State indivisible works contracts were not taxable under the Central Sales Tax Act. The petitioner-company thus had not paid tax on such inter-State works contract under a bona fide belief and a view of law taken by it on the basis of two Full Bench decisions of the Punjab and Haryana High Court in East India Cotton Manufacturing Company Limited v. State of Haryana [1993] 90 STC 221 and T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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