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TMI Blog2001 (8) TMI 1355X X X X Extracts X X X X X X X X Extracts X X X X ..... 05, the break-up of which was as under: First quarter ... Rs. 27,37,516.58 Second quarter ... Rs. 10,13,628.68 Third quarter ... Rs. 85,832.79 Fourth quarter ... Rs. Nil 3.. A notice under section 11(2) of the Act on form ST-XIV was issued on October 5, 1978 requiring the petitioner to produce the account books and the declarations to enable the Assessing Authority to complete the assessment. It is alleged that the said notice had been served on an ex-employee Shri Ram Lal who was no longer in the employment of the firm. It is further claimed that no notice was served on any of the partners of the firm. In August, 1982, one partner Shri Narinder Kumar on learning about the pending proceedings, appeared before the Assessing Authority on August 10, 1982 and furnished the details of other partners. In November, 1982, two partners namely Smt. Kaushalya Devi and Shri Hans Raj Bajaj appeared before the Assessing Authority and expressed their inability to produce the books of accounts. Finally, a notice dated January 25, 1983 was issued to the petitioner in the following terms: "Assessment for the year 1974-75 is lying pending for finalisation for want of production of account/decla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order of the Tribunal has been attached as annexure P5 with the writ petition. It is under these circumstances that the petitioner had filed the present writ petition praying that the orders, annexures P2, P4 and P5, be quashed and respondent No. 1 be restrained from recovering the demand in pursuance of the assessment order dated January 31, 1983, annexure P2. 6.. The challenge to the best judgment assessment framed under section 11(4) of the Act on January 31, 1983 is on the following two grounds: (i) The assessment is barred by limitation as the Assessing Authority had not proceeded to make the best judgment assessment within five years from the end of the period for which the assessment was to be framed. (ii) The estimate of the gross turnover at Rs. 60 lacs is arbitrary being without any basis. The petitioner was never confronted with any material in support of the estimate. 7.. A written statement has been filed by the Excise and Taxation Officer-cum-Assessing Authority, Malout, on behalf of the respondents. In the written statement, it had been controverted that the gross turnover declared by the petitioner was Rs. 38,36,976.05. It was clarified that this was the turno ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Authority is empowered within five years after the expiry of the period in respect of which the returns are filed to proceed to assess to the best of his judgment. 10.. Thus, according to the learned counsel for the petitioner, the scheme of section 11 clearly shows that the Assessing Authority can proceed to assess to the best of his judgment only after a dealer had failed to comply with the notice under section 11(2) of the Act. This, according to him, would mean that first there has to be a notice under section 11(2) of the Act and it is only on the failure of the dealer to comply with this notice, that a notice showing the positive act on the part of the Assessing Authority to proceed to make a best judgment assessment can be issued. Thus, he contended that the notice dated October 5, 1978 was merely a notice requiring the petitioner to produce evidence in support of its return and it was only on January 25, 1983 when memorandum (annexure P1) was issued that the Assessing Authority could be said to have proceeded to assess to the best of his judgment. He relied on the judgment of the apex Court in Indian Aluminium Cables Ltd. v. Excise and Taxation Officer [1977] 39 STC 19 i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g Authority intimating the petitioner that he was proceeding to assess to the best of his judgment the amount of tax due from the dealer. This notice, according to him, was clearly beyond the period of limitation which had expired on March 31, 1980. 11.. On the second issue, he submitted that the petitioner had never been confronted with the basis for estimating its gross turnover at Rs. 60 lacs which was a necessary pre-requisite for making an estimate of turnover even in a best judgment assessment. He placed reliance on the decision of this Court in S. Sant Singh v. Assessing Authority, Amritsar [1971] 28 STC 567. 12.. Ms. Gurveen H. Singh, learned Deputy Advocate-General, appearing on behalf of the respondents controverted the claim made on behalf of the petitioner. According to her, the notice on form ST-XIV dated October 5, 1978 duly contained the following lines: "In the event of your failure to comply with notice I shall proceed to assess under section 11 of the Punjab General Sales Tax Act, 1948 to the best of my judgment without further reference to you." 13.. It is, therefore, contended that the Assessing Authority had clearly indicated his mind to the dealer that in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctober 5, 1978 on form ST-XIV had been issued. The said notice being well within five years from the period for which the assessment was to be framed, the assessment cannot be said to be barred by limitation. 15.. Coming to the second issue about the reasonableness of the estimate of the gross turnover at Rs. 60 lacs, I find that the Assessing Authority has been more than fair. At the outset, it has been correctly pointed out that from a reading of the writ petition it had been projected that the gross turnover had been estimated at Rs. 60 lacs against the turnover of Rs. 38,36,976.05 as per the returns filed. This was factually incorrect. As pointed out in the written statement, which has not been controverted, the returned gross turnover was Rs. 53,90,378.94. In fact, this is also evident from ground No. III raised before the Deputy Excise and Taxation Commissioner, which reads as under: "That the authority below further erred while making assessment at such a high figure as Rs. 60,00,000 against Rs. 53,90,378 as declared by the appellant which is without any proper material on the record". 16.. Further, another incorrect projection had been made in the writ petition in sub-pa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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