KUNWAR INDUSTRIES Vs. SALES TAX OFFICER

JUDGEMENT

(1.) By this petition filed under Article 226 of the Constitution of India the petitioner seeks quashing of proceedings for escaped assessment initiated under Section 21 of the U. P. Sales Tax Act for 1971-72 both for absence of any material on which any opinion as contemplated in Section could be formed and on failure to serve notice in accordance with Rule 77.

(2.) Originally the petitioner had challenged the recovery proceedings commenced in pursuance of ex parte assessment order only although the order itself had been challenged in appeal and an application under Section 30 for recall of the order was also filed. While this petition and appeal were pending the application under Section 30 was rejected against which the petitioner went up in appeal which was allowed. Consequently the ex parte order giving raise to this petition stood set aside. An application was filed on behalf of the respondent for dismissing the writ petition as infructuous. But before this application could be decided the Sales Tax Officer passed fresh orders under Section 21 which too were challenged by an application under Order 6, Rule 17, which was allowed by this Court. Although the order is not challenged on merits but the learned counsel for the petitioner has assailed it on the same ground, namely, lack of jurisdiction in absence of proper service of notice issued under Section 21 and non-application of mind. Admittedly the proceedings had been reopened under Section 21 by the Sales Tax Officer as information had been received from the Director of Industries that the petitioner had import licence. According to the petitioner there was no material and the information was insufficient for the formation of reasonable ground to believe that the turnover had escaped assessment. And notice issued for verification of information was beyond the scope of Section 21. Whereas the case set up in the counter-affidavit is that the information received was that the petitioner had been granted import licence of Rs. 13,75,000 but it had disclosed total turnover of Rs. 3,47,675 and consequently the Sales Tax Officer had reason to believe that entire turnover had not been disclosed.

(3.) We however do not propose to go into this controversy as in our opinion the submission of the learned counsel for the petitioner that the notice issued under Section 21 was not served appears to be well-founded. It is not denied in the counter-affidavit that the firm had been closed on 31st July, 1972, and information of the closure had been received by letter dated 25th February, 1972. Nor is it denied that on 22nd March, 1976, one notice was sent by registered post and another for personal service through process-server with a direction that in case the assessee was not found or refused to accept the notice it may be served by affixation. On 23rd March, 1976, the process-server submitted a report that the firm had been closed since long and as the proprietor of the firm was not available service was effected as directed by affixation. In the counter-affidavit it has been stated that this procedure was adopted as limitation was expiring on 31st March, 1976.