TMI Blog2005 (1) TMI 632X X X X Extracts X X X X X X X X Extracts X X X X ..... unsel for the petitioners the modus operandi adopted by the department, especially by the Intelligence Wing is that they will inspect the business premises of the dealer and on the alleged irregularities found in the course of inspection they used to obtain statements from the persons, who are available at the business premises at the time of inspection by force or coercion threatening to seize the stock or close down the business and thereupon collect the tax for the alleged suppression of the sales turnover and also demand for compounding the alleged offence on the very same day and creates the record as if a show cause notice was issued and a reply was given on the same date and also passing an order accepting the offence for compounding the offence by levying the compounding fee, which is almost equivalent to the alleged tax found due on the suppressed turnover. The department officials also collect the cash if available on the spot or if it is not available they will collect post-dated cheques, and thereafter there will not be any further proceedings either for assessment or otherwise. It is contended on behalf of the counsel appearing for the petitioners that this action of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncement by resolving the conflict if any among the decisions of this Court. Therefore, the matter was placed before the honourable the Chief Justice for referring to a larger Bench. That is how the Full Bench was constituted to hear all these matters. 5.. As the facts are different in each of the case, for convenience, we refer the facts that are available in W.P. No. 3253 of 2004. In this case, the petitioner is a registered dealer, engaged in the business of decorticating the groundnuts. According to the dealer, the said decorticating activity was carried on only for the benefit of the farmers, who were growing the groundnuts, and the petitioner charges only the commission or the charges for converting the groundnut kennel into seed. It is also the case of the dealer that it obtained licence under section 7 of the Andhra Pradesh (Agricultural Produce and Live Stock) Markets Act, 1966 and was submitting its returns to the Agricultural Market Committee, Uravakonda, Ananthapur District. It is also its further case that though it was also registered as a dealer under the Andhra Pradesh General Sales Tax Act, 1957 (hereinafter referred to as "the Act") before the second respondent, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as collected the said amount accepting the proposal for compounding the offence. It is also disputed that the departmental officials have obtained a statement by coercion or threat. Further, as it is a question of fact the same cannot be adjudicated upon in the present writ petition. It is also stated that the dealer has come forward offering to compound the offence, instead of prosecution, and the department has accepted the same. Therefore, it is not open to the petitioner to question the said action. 7.. From the above facts, the issue to be considered is whether the action of the departmental officials in collecting the tax as well the compounding fee on the same day of the inspection is in accordance with the provisions of the Act. 8.. Before proceeding to adjudicate upon the issue it is proper to refer to the relevant provisions of the Andhra Pradesh General Sales Tax Act, 1957 and the Rules. "Section 12. Registration of dealers. (1) Every dealer (other than casual trader) whose total turnover in any year is not less than Rs. 50,000 shall and any other dealer may get himself registered under this Act. Section 13. Submission of return of turnover by dealer. Every dealer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... suing a notice to the dealer and after making such inquiry as he considers necessary, assess to the best of his judgment, the amount of tax due from the dealer on his turnover for that year, and may direct the dealer to pay, in addition to the tax so assessed a penalty as specified in sub-section (8). (4) In any of the following events, namely, where the whole or any part of the turnover of business of a dealer has escaped assessment to tax, or has been under-assessed or assessed at a rate lower than the correct rate, or where the licence fee or registration fee has escaped levy or has been levied at a rate lower than the correct rate, the assessing authority may, after issuing a notice to the dealer, and after making such enquiry as he may consider necessary, by order, setting out the grounds therefor (a) determine to the best of his judgment the turnover that has escaped assessment and assess the turnover so determined; (b) assess the correct amount of tax payable on the turnover that has been under-assessed; (c) assess at the correct rate the turnover that has been assessed at a lower rate; (cc) assess the correct amount of tax payable, in a case where any deduction o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he tax payable under this Act for each year may be provisionally assessed in advance during the year in monthly or other prescribed instalments on the basis of estimated or actual turnover of the dealer; and for that purpose a dealer may be required to submit a return or periodical return of estimated or actual turnover and pay the tax on the basis of such return or periodical returns, in such manner as may be prescribed. (2) If the assessing authority has reason to believe that the provisional assessment for any period was made on too low a turnover or at too low a rate, or on too high a turnover or too high a rate, he may enhance or reduce, as the case may be, such provisional assessment: Provided that before making an enhancement of the provisional assessment as aforesaid the assessing authority shall, except where such enhancement is based on the turnover finally determined for the preceding year, issue a notice thereof to the dealer and make such inquiry as he considers necessary. (3) The tax provisionally assessed may be levied and collected, either in advance during the year in monthly or other prescribed instalments or at any time thereafter in one lumpsum. (4) An ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nalty, instalment or other amount, interest at the rate of one rupee and fifty paise for every one hundred rupees or part thereof for each month or part thereof, from the date specified for its payment for the period so extended or on the instalments so permitted. (3)(a) If the tax assessed or penalty levied or any other amount due under this Act or any instalment thereof is not paid by any dealer or other person within the time specified therefor in the notice of demand or in the order permitting the payment in instalments or in any other provision of the Act or the Rules made therefor, the dealer or other person, shall pay, in addition to the amount of such tax, penalty, instalment or any other amount, interest calculated per every one hundred rupees or part thereof at the rates mentioned below for the period of delay from the due date or date specified for its payments. (i) within 30 days of delay at the rate of 18 per cent of the tax due above 30 days but below 90 days of delay at the rate of 24 per cent of the tax due above 90 days but below 365 days of delay at the rate of 30 per cent of the tax due for delay exceeding one year at the flat rate of 36 per cent of the tax d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e dealer a receipt for the same. The accounts, registers and documents so seized shall be retained by such officer only for so long as may be necessary for their examination and for any inquiry or proceeding under this Act: Provided that such accounts, registers and documents shall not be retained for more than thirty days at a time except with the permission of the next higher authority. (4) For the purposes of sub-section (2) or sub-section (3), any such officer shall have power to enter and search, at any time during the business hours prescribed under the relevant law for the time being in force, or where no such hours are prescribed, at all reasonable times, any office, shop, godown, vessel, vehicle or any other place of business or any building or place where such officer has reason to believe that the dealer keeps or is, for the time being, keeping any goods, accounts, registers or other documents of his business: Provided that no residential accommodation (not being a shopcum-residence) shall be entered into and searched by any such officer below the rank of Deputy Commissioner except on the authority of an order issued by any officer not below the rank of a Deputy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and (3). Section 30. Offences and penalties. (1) Any person who (a) fails to pay within the time allowed, any tax assessed on him or any penalty levied, or any fee due from him, under this Act; or (b) being a person obliged to register himself as a dealer under this Act, does not get himself so registered; or (c) wilfully acts in contravention of the provisions of this Act or the Rules made thereunder shall on conviction be liable to be punished with fine which shall not be less than five hundred rupees but which may extend to two thousand rupees. (2) Any person who (a) prevents or obstructs inspection, entry, search or seizure by an officer authorised under section 28, in contravention of the terms thereof; or (b) prevents or obstructs inspection of any goods vehicle or boat carrying goods, by an officer-in-charge of check-post or barrier or any officer empowered under section 29, shall on conviction, be liable to be punished with simple imprisonment which shall not be less than three months but which may extend to one year and with fine which shall not be less than five hundred rupees but which may extend to two thousand rupees: Provided that the minimum sent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd to two thousand rupees. Section 32. Composition of offences. (1) The prescribed authority may accept, from any person who has committed or is reasonably suspected of having committed an offence under this Act, by way of composition of such offence (a) where the offence consists of the failure to pay or the evasion of any tax, recoverable under this Act, in addition to the tax so recoverable, a sum of money not exceeding three thousand rupees or double the amount of the tax recoverable, whichever is greater, and (b) in other cases a sum of money not exceeding three thousand rupees. (2) Any order passed or proceeding recorded by the prescribed authority under sub-section (1) shall be final and no appeal or application for revision shall lie therefrom. 9.. A perusal of the above provisions of the Act shows the scheme as to the liability of the dealer to file the returns declaring correct statements of affairs and the powers of the assessing officer and other authorities empowered to take various steps not only to get the correct facts as to the turnover and the nature of the transactions, but also even to impose penalties as well as to prosecute for the offences contem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f tax, and such penalty has to be levied only after giving the assessee an opportunity. Section 16 provides for payment of tax and other dues payable under the Act. The tax assessed, whether provisionally or finally, and the penalty levied shall be paid by the dealer within the time fixed by the authority, but such time is not being less than 15 days from the date of service of notice of assessment or the penalty. The time-limit prescribed above for collection of the tax would not be applicable to casual traders. But, however, the assessing authority is given the discretion where there are circumstances, the period of 15 days may be reduced for good and sufficient reasons to be recorded in writing, but even in such cases, the period shall not be less than seven days from the date of service of notice of demand. But, the exception is that where the dealer filed returns, but fails to pay the tax due as per the return, in such cases it shall not be necessary to give any minimum time, as referred to earlier. It is also provided to the dealer to seek extension of time and the Deputy Commissioner is empowered to grant extension of time for payment of tax, penalty or any other amount or e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Rules made in that behalf. The officer referred to earlier is also having the power to break open any box or receptacle in which any goods, accounts, registers or other documents of the dealer may be contained, but such break open shall be exercised only after giving the owner or any other person in occupation, a notice and if he fails or refuses to open the door on being called upon, such officer has also given the power to seal the premises or the box or receptacle or godown for a period not exceeding 24 hours. The above referred officer is also given the power to seize and confiscate any goods, which are found in any office, shop, godown, vehicle, vessel or any other place of the business or place of the dealer, but not accounted by the dealer in his accounts, registers and other documents maintained in the course of his business. But, such act of seizure and confiscation has to be effected only after giving an opportunity to the dealer. Section 30 deals with the offences and penalties. Any person, who fails to pay the tax assessed within the time or penalty or any fee; any person obliged to register himself as a dealer, but does not get himself so registered; wilfully ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be punished with simple imprisonment, which may extend to one year in addition to the fine of Rs. 500 to Rs. 2,000. The owner of the boat or the goods vehicle, however is also held liable to be punished similarly, unless he proves that the offence was committed without his knowledge and that he exercised all due diligence to prevent the commission of such offence. If a driver or any other person-in-charge of a boat or goods vehicle refuses on demand by an officer-in-charge of the check-post or any other officer empowered under sub-section (2) of section 29, to give his name and address or the name and particulars of the owner of the boat or goods vehicle or of the consignor and consignee of the goods or gives any false information in respect of the above, he shall on conviction be liable to be punished with simple imprisonment up to one year and with fine of Rs. 500 to Rs. 2,000. Any person, who makes a statement or declaration in any of the records or documents specified in sections 26 and 27, knowing fully that such information furnished is false, shall on conviction be punishable as referred to earlier. Similarly, a person, who is a party in any fraudulent evasion or attempt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ept the compounding of the offence, and, accordingly, they are collecting compounding fee and the tax payable by the dealers. 11.. Both sides have relied upon various decisions in support of their respective claims. Hence, it would be appropriate to refer to those decisions here. The first set of decisions relied upon by the petitioners are as under: In Annam Jewellers v. Deputy Commercial Tax Officer [1996] 102 STC 506, a division Bench of this Court had an occasion to examine the action of the department in similar situation. In that case two writ petitions filed by two dealers were disposed of together. Both are proprietary concerns, engaged in the business of gold and silver articles. Both the premises were inspected by the first respondent, and on verification of the stocks, the inspecting authority got recorded statements from both the writ petitioners that the petitioners were liable to pay tax under section 6-A of the Andhra Pradesh General Sales Tax Act, 1957, and accordingly, collected the tax as well as the penalty, which was five times that of the tax payable and the amount was collected by way of cheques. The said action of the department was questioned on the gr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Line Devices v. Commercial Tax Officer [2000] 119 STC 52 by another division Bench of this Court. In this case the petitioner filed the writ petition aggrieved by the action of the respondents in collecting cheques for a sum of Rs. 13,12,563 towards tax and compounding fee on the spot without making an assessment or demand as illegal and contrary to the provisions of the Act. The petitioner is a registered dealer, dealing in life saving cardiology equipment. It has a branch at Calcutta. There was a surprise inspection by the staff of the Regional Vigilance and Enforcement Officers on October 22, 1999. On that day, a statement was recorded from the Managing Partner of the petitioner-firm in which he stated that at the time of inspection there were loose papers and note books showing the business transactions apart from the files and registers. The books of accounts were stated to be with the auditor. The Managing Partner gave the particulars of stock found in the premises. On November 2, 1999, a further statement was recorded, according to which the petitioner-firm effected supplies of high value stents and balloons to various corporate hospitals to avail of the sales tax exempt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ues or money towards the tax estimated or even admitted to be due and leave it to the competent assessing officer to do this part of the job after giving opportunity to the assessee before passing an order in conformity with the provisions of the Andhra Pradesh General Sales Tax Act and the Rules. Otherwise, they will be liable to be dealt with under the Contempt of Courts Act." 14.. In Sree Rama Trading Company v. Commercial Tax Officer (Int.) No. 1, Hyderabad (1989) 8 APSTJ 57 a division Bench of this Court had an occasion to consider the issue of collecting the compounding fee at the time of inspection. In that case, the petitioner, a registered dealer, was carrying on business in the manufacture and sale of groundnut oil and cake. Its business premises was inspected on January 5, 1982 by the respondent and on January 8, 1982 the authorities recorded the statement of one of the partners of the petitioner-company that there has been an excess stock of 9,321 kgs. of groundnut cake compared to the ground stock. The officer also found that the petitioner has not maintained the books properly. On that basis, the department issued a notice calling upon the petitioner to reply within ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tioner was that under the provisions for the recovery of the admitted tax when the return was not accompanied by proof of payment of tax, even before the final assessment is made, the Central Rules do not make any provision for making a best judgment assessment and for the recovery of the said tax. According to the petitioner, as per the Rules, the best judgment assessment can be made provisionally only where a return is not filed or the return filed is incorrect, but not where the turnover disclosed in the return is not disputed or the return is not accompanied by proof of payment of tax. According to this Court, in terms of rule 14-A(4), the assessing officer has to give a notice to the dealer, giving opportunity to prove the correctness and completeness of the return, only then determine the turnover to the best of his judgment and provisionally assess the tax payable. But the assessing officer violated the principles of natural justice, as no opportunity was given to the assessee; therefore, set aside the assessment and consequently the notice issued. However, the matter was left open to the respondent for proceeding in accordance with law. 16.. In Brugumalla Venkatappaiah ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of enquiry, while the respondent may suspect that the petitioner has not submitted a correct return of the turnover, it cannot be held that the Commercial Tax Officer, Guntur, has a reasonable suspicion. Mere suspicion cannot be equated with reasonable suspicion. Only the result of an enquiry could form the basis for any reasonable suspicion that the petitioner has committed an offence, which he may or may not agree to be compounded in accordance with section 32 of the Act. Until an enquiry, pursuant to the Notice G.I. No. 2717/69-70/1 is completed, in my opinion, the Commercial Tax Officer cannot entertain a reasonable suspicion that the petitioner has committed an offence. Hence, the question of asking him to choose either to face a prosecution or agree to the composition of an offence, does not arise. The impugned notice is, therefore, premature, and accordingly quashed." 17.. In Baldev Raj Kabaria v. State of Punjab [1982] 50 STC 337, a division Bench of the Punjab and Haryana High Court had an occasion to consider the legality to record a statement of the assessee to find out the liability to be assessed or not. The division Bench, while considering the question referred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urnover, vide Cheque No. 981177, dated 21st February, 1993'. In respect of the petitioner in W.P. No. 2444 of 1993 also, a similar statement was recorded. In other words, they have admitted that the transactions recorded in the books of account have not been reported in the returns filed by them. Having accepted before the authority that they have suppressed the inclusion of the transaction in the returns and having paid the tax by way of cheques, to avoid the seizure of stocks and seal of the business premises, it is now not open to the petitioners, to seek for a direction not to encash the cheques issued by them. It is open to the petitioners to raise the objection before the assessment authorities." 20.. In Kaki Butchi Raju Son v. State of Andhra Pradesh [1995] 96 STC 634; (1994) 19 APSTJ 19 a division Bench of this Court had an occasion to consider the issue of collection of tax and compounding fee based on the statements. In this case, the petitioner, a registered dealer, challenged the legality of the order passed by the Commercial Tax Officer, Peddapuram, dated December 31, 1991 by which that authority accepted the petitioner's offer to compound the offence of tax evasion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er whether Vigilance and Enforcement Officer can collect tax at the time of inspection of the business premises of a dealer. In this case on November 25, 1991, the place of business of the petitioner was inspected by the respondents and found certain rough figures in a diary relating to reconciliation of accounts with the petitioner's supplier. The respondents also noticed the payments of certain amounts entered in the said diary. According to the petitioner, the respondents forced the Managing Partner of the petitioner-firm to give statement as if the purchases were made in the month of October 1991 and payments made by the petitioner were unaccounted though made in the month of October 1991, and the petitioner sold the resultant furniture made out of such purchases of iron and steel for Rs. 1,54,750 and as first seller, he is liable to pay tax. Accordingly, the respondents issued a notice dated November 25, 1991 to the petitioner requiring it to pay a tax of Rs. 11,198 and offer the explanation if any on the question of irregularities noticed, and further indicating that the department is willing to compound the offence if the petitioner desires to do so; and accordingly collecte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Vigilance Officers, if they have got the power of assessment, can make the assessments after complying the procedure provided under the provisions of the Act; or otherwise those authorities can forward the statements recorded from the dealer to the concerned assessing authority, who can make assessment either provisional or final or even revise the assessment basing on the material in accordance with law. Until and unless an assessment is made, no liability can be fastened on the dealer and equally the department is not entitled to collect any amount on the premise that the dealer has come forward accepting the alleged suppressed turnover or other irregularities and the same cannot be the basis for collection of tax, without preceding the same by an assessment order or any other order, fixing the liability of the dealer. If such a procedure is followed by the officers, either assessing or the vigilance, the complaint of the dealers that statements were obtained by force and coercion could be avoided, as in such cases, the dealers can have a right to dispute the statements already recorded and satisfy the concerned assessing authority about his claim of non-liability to the tax, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before making an assessment, compounding fee is being levied equal to or double the amount of the alleged amount of tax sought to be evaded, even in the absence of any assessment order quantifying the tax liability. Such levy and collection is clearly contrary to the provisions of the Act. In fact a learned single Judge of this Court in Brugumalla Venkatappaiah Son and Co. v. Commercial Tax Officer [1973] 32 STC 34, quashed a notice issued proposing to compound the offence, when issued along with a notice for assessment of the alleged suppressed turnover, as the learned judge was of the view that such a notice could not be issued even before coming to the conclusion as to the tax liability. No doubt, a notice to compound an offence for levying compounding fee unrelated to the assessment may be issued, but even in such cases also a notice giving opportunity of minimum period contemplated under the provisions of the Act and the Rules must be provided. The non-compliance of such minimum period would always gives scope to make allegations of coercion and duress on the dealer. Not only to avoid such a situation but also to comply with the provisions of the Act and the Rules, it is manda ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act, but, however expressed that a suit is maintainable to question the collection of tax, which is allegedly done under undue influence and coercion and under the threat of arrest and imprisonment. The division Bench also felt that there is no machinery provided under the Act to question the nature of the order, which is said to have been passed and the tax collected under undue influence and coercion as well as threat of arrest and imprisonment. In the absence of any specific machinery, the court felt that the provisions of section 36 may not come in the way to institute a suit in a civil court. But, we are unable to agree with the said view expressed by the learned Judges of this Court. When the Legislature enacted a provision prohibiting any of the parties to the proceedings under the Act to approach any other forum than what is provided under the provisions of the Act, it is not for this Court to hold that still a suit could be maintained, if an order or proceeding is alleged to have been passed under certain circumstances, as referred to earlier. In fact, if the assessing authorities provided enough time as provided under the Act and the Rules, the dispute could be resol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax and compounding fee on the spot, without passing any order of assessment. In that view of the matter, the matters were placed before the honourable the Chief Justice, for appropriate orders, as to posting. It was in this context, that the Full Bench was constituted to hear and dispose of the matters. 3.. In the affidavits filed in support of the writ petitions, the common plea raised by the petitioners is that they were forced to part with cash or post-dated cheques, at the time of inspections undertaken, mostly by the vigilance wing. It was alleged that the very proposal for compounding the alleged violations emerged from the departmental authorities, in the form of coercion, and amounts were collected without there being any order of assessment or issuing demand notices. 4.. In the counter-affidavits filed on behalf of the respondents, it is broadly stated that, in the instant cases, the departmental officials noticed suppression of turnover by the respective petitioners, and when steps were about to be taken, for collection of arrears of tax and penalty, as well as to initiate prosecution, they volunteered to pay the due of tax and compounding fee. It is pleaded that when ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered as such under the Act, is under obligation to submit the return of the turnover. A dealer may be required to submit even a provisional assessment. Section 16 mandates that the tax shall be paid, and it provides for levy of penalty as well as interest on delayed payment of undisputed tax. It is not necessary to refer to the minute details thereof. 8.. Section 28 empowers the officers, not below the rank of Assistant Commercial Tax Officer, authorised by the State Government, in this behalf, to require any dealer to produce the accounts, register and other documents, and to furnish any information, relating to his business. He is also vested with the power to enter and search the offices, shops, godowns, etc., during the business hours, for this purpose. Separate procedure is prescribed for search of residential premises. However, it needs to be noticed that section 28 does not exempt the concerned officer from following the procedure prescribed under section 14, in the matter of passing an order of assessment, namely, issuance of notice, consideration of explanation and passing an order of assessment, even where any suppression of turnover is noticed during the course of insp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earlier judgments in Annam Jewellers v. Deputy Commercial Tax Officer [1996] 102 STC 506 (AP) and Priyanka Wines v. Assistant Commissioner [1998] 110 STC 73 (AP). His Lordship Justice P. Venkatarama Reddi, as he then was, observed as under: "..........the Andhra Pradesh General Sales Tax Act within the realm of which the second respondent and his superiors are supposed to discharge the functions, does not authorise the on-the-spot collection of tax by coercion. The Act provides for assessment provisional or final and a procedure therefor..." In no other judgments, this authoritative pronouncement was either dissented or departed from. 11.. The respondents seek to take shelter under certain observations made by this Court in the decisions rendered in S.R. Traders Bhavani Traders v. Assistant Commissioner of Commercial Taxes [1994] 92 STC 626; (1993) 17 APSTJ 125, Kaki Butchi Raju Son v. State of Andhra Pradesh [1995] 96 STC 634; (1994) 19 APSTJ 19, Badrinath Oil Company v. Assistant Commissioner (Int.) (1995) 21 APSTJ 28, Bharat Metals v. Special Assistant Commercial Tax Officer [1999] 112 STC 63; (1998) 27 APSTJ 72 and Sri Lakshmi Venkata Raghava Traders v. Commercial Tax O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as under: "............if the person sought to be taxed comes within the letter of the law he must be taxed, however great the hardship may appear to the judicial mind to be. On the other hand, if the Crown, seeking to recover the tax, cannot bring the subject within the letter of the law, the subject is free, however apparently within the spirit of the law the case might otherwise appear to be. In other words, if there be admissible, in any statute, what is called an equitable construction, certainly such a construction is not admissible in a taxing statute, where you can simply adhere to the words of the statute." In Commissioner of Sales Tax v. Modi Sugar Mills [1961] 12 STC 182 (SC); AIR 1961 SC 1047, Justice Shah, as he then was, held as under: "In interpreting a taxing statute, equitable considerations are entirely out of place. Nor can taxing statutes be interpreted on any presumptions or assumptions. The court must look squarely at the words of the statute and interpret them. It must interpret a taxing statute in the light of what is clearly expressed: it cannot imply anything which is not expressed; it cannot import provisions in the statute so as to supply any assum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is permissible for a person to offer for composition of offences, both when it is found that he is committed offence, or, where he is reasonably suspected to have committed the same. In either case, an order, fixing the liability to pay the tax has to exist. Liability to pay the tax, on the one hand, and liability to be punished for non-payment of the same are two different aspects. While the former ensues on account of non-payment of tax, irrespective of the reason therefor, the latter follows only when it is established that there was an intention on the part of the person concerned to evade the tax. In the context of sub-section (2) of section 32, adding finality to orders compounding the offences, the prescribed authority is under obligation, to meticulously follow the procedure. Once an order holding a dealer liable to pay the tax is found to be sine qua non, before proceedings for compounding the offence are taken up, it is axiomatic that such orders shall conform to the procedure prescribed under section 14. 17.. For an order of compounding to ensue as a consequence and result of inspection, the following steps have to take place: (a) The inspection has revealed suppres ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsible person of the business concern. (ii) Basing on such information, if any of the officer of the said Vigilance or Intelligence Wing Department is empowered to make assessments, such officer can proceed to frame assessments basing on the material and such assessments could be completed only after complying the procedure provided under the provisions of the Act and Rules, i.e., granting sufficient opportunity to adduce evidence by the dealer for the proposed assessment, i.e., as to the quantities as well as valuation of the stocks, etc.; otherwise such material or information can be forwarded to the assessing authority having jurisdiction for taking appropriate action including the assessment, reassessment, etc. (iii) There shall be at least a gap of one week between the date of an order of assessment, or demand notice, as the case may be, and an order compounding the offence, wherever the dealer comes forward with such an offer. (iv) The judgments in S.R. Traders and Bhavani Traders v. Assistant Commissioner of Commercial Taxes [1994] 92 STC 626 (AP); (1993) 17 APSTJ 125, Kaki Butchi Raju Son v. State of Andhra Pradesh [1995] 96 STC 634 (AP); (1994) 19 APSTJ 19, Badrinath ..... X X X X Extracts X X X X X X X X Extracts X X X X
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