PAG PRECISION BEARING LIMITED Vs. SALES TAX OFFICER

JUDGEMENT

(1.) THE petitioner-company is having its registered office at Bombay and its head office and factory at Baroda. It is registered as a "dealer" under the Central Sales Tax Act, 1956 (hereinafter referred to as "the Central Act") as well as the Gujarat Sales Tax Act, 1969 (hereinafter referred to as "the Local Act" ). The petitioner sells its goods within and outside the State of Gujarat. It has branch offices at various places in India. At places where the petitioner has branch offices, the petitioner despatches goods to its branch offices from time to time and the said branch offices subsequently sell the goods in the State in which they are located. The said sales effected by the branch offices are subjected to local sales tax by the States, wherein the branch offices are located. In respect of the sales effected directly by the petitioner in other States, the petitioner pays sales tax under the Central Sales Tax Act. It is subjected to tax under the Gujarat Sales Tax Act in respect of the sales effected by it within the State of Gujarat. It appears that, some transactions, which the petitioner described as "branch transfers", are considered by the department as inter-State sales and possibly to find out the real nature of those transactions, a search was carried out on February 3, 1983 and large number of account books and other records had been seized by the department. Meanwhile, for the assessment period September 1, 1976 to August 31, 1977, respondent No. 1, the concerned Sales Tax Officer, prepared a draft assessment order and served the same on the petitioner on August 10, 1982. The petitioner has filed its objections on August 26, 1982. On February 12, 1985, the 1st respondent issued a show cause notice, calling upon the petitioner to show cause why the branch transfers earlier accepted in the draft assessment order should not be disallowed and also submitted a revised draft assessment order. On March 15, 1985, the petitioner objected to the same. Thereafter, hearings were fixed, but, according to the petitioner, no effective hearing has taken place so far.

(2.) IT is the petitioner's case that, similar is the position with respect to the assessment period September 1, 1977 to August 31, 1984. It is also the petitioner's case that the 2nd respondent, exercising powers under section 42 (1) proviso has been staying the assessment proceedings by giving a stock reason : "the assessment proceedings were going on and that as some more time would be required and as it is not possible to complete the assessment proceedings within the time prescribed by law". That way, the assessment proceedings were stayed till August 31, 1987. After that date, the petitioner did not receive any show cause notice, calling upon it to show cause why the assessment proceedings for those years should not be stayed for a further period of one year. But, on September 18, 1987, an Inspector of Sales Tax came to the petitioner's office and tried to serve upon the petitioner an order, purporting to have been passed by the 2nd respondent on August 31, 1987, under section 9 (2) of the Central Act read with section 42 (1) of the Local Act. The petitioner declined to accept such ante-dated order. Thereafter, on September 22, 1987, the 1st respondent served the said order on the petitioner. The 1st respondent also served on the petitioner a notice of hearing of the assessment proceedings for the period 1977-78 to December 31, 1982. The petitioner contended that the assessments for those periods have become time-barred and, therefore, the question of attending the hearing of the assessment proceedings does not arise. As the Sales Tax Officer in spite of the objection raised by the petitioner, wanted to proceed further with the proceedings, the petitioner has filed this petition, challenging the order dated August 31, 1987 and respondent No. 1's action of proceeding further with the assessment proceedings for the period commencing from September 1, 1976 to August 31, 1984.

(3.) THE learned counsel submitted that, if the impugned order was really passed on August 31, 1987, then, in that case, it would have been served upon the petitioner on August 31, 1987 and the department would not have waited for that purpose till September 22, 1987. If the order was really passed on August 31, 1987, then, the Sales Tax Inspector would not have asked the petitioner to put the date August 31, 1987, on the receipt acknowledging service of that order. These two circumstances are relied upon by the learned counsel in support of his submission that, in fact, the order was not passed on August 31, 1987.