INDO NATIONAL LIMITED Vs. STATE OF UTTAR PRADESH

JUDGEMENT

(1.) THE petitioner has sought for quashing the present notice under section 21 of the U. P. Sales Tax Act, 1948, dated May 8, 1981, issued by respondent No. 2 for the assessment years 1977-78 and 1978-79 (annexure 5 and 6 to the writ petition ). THE petitioner has challenged the notice mainly on the ground that though the notice states the turnover of sales has escaped the assessment but the respondent-authority has neither disclosed that in the said order, nor subsequently, in spite of petitioner's making such an application, for replying to the said notice. Further by issuance of this notice, the respondent-authority has committed jurisdictional error. In the counter-affidavit the stand taken is, while assessing earlier this petitioner has been assessed to tax at a lower rate, hence notice under section 21 of the Act. THE respondents' case is that dry cell batteries are taxable at 10 per cent while it has been assessed at the rate of 7 per cent. Before dealing with the points raised by the learned counsel for the petitioner, it is necessary to record certain facts. THE Commissioner of Sales Tax earlier issued a circular on May 14, 1979, informing that dry cell batteries are taxable under section 3-A (2-A) of the Act at the rate of 7 per cent. as unclassified items at the point of sale by the manufacturer or importer. In pursuance of the same the assessing authority after inspecting the account books of the petitioner assessed the petitioner and imposed the tax on the petitioner at the rate of 7 per cent on the turnover of dry cell batteries plus 1 per cent as surcharge. THE contention is, there is no question of any turnover of the assessee having escaped assessment, hence the impugned notice issued under section 21 of the Act, is illegal and without jurisdiction. Thus question is whether any turnover of sale of the petitioner escaped and could this be constituted to as jurisdictional error. After receiving the impugned notice dated May 8, 1981, before the assessing authority requiring information as to which turnover of the sales has escaped the assessment but in spite of the two applications of the petitioner which are (annexure 7 and 8 to the), no reply was given. Hence the present petition has been filed. It is surprising that the counter-affidavit is filed on behalf of the respondent-authority after 13 years and the stand taken therein is that petitioner has been assessed of tax at a lower rate than it should have been. THE counter-affidavit does not take stand that any turnover of sale has escaped assessment. This is contrary to the impugned notice. THE impugned notice also does not disclose which part of the sale has escaped assessment. In spite of the aforesaid two applications filed by the petitioner, the respondent-authority has also not communicated about this escaped assessment. THE irresistible conclusion on these facts is that till this date noting has been shown that any turnover of sale has escaped assessment. Even the stand in the counter-affidavit that the tax imposed earlier was at lower rate is not sustainable. This question is squarely covered by the decisions reported in Commissioner of Sales Tax v. Geep Industrial Syndicate Ltd. UPTC 324 and in Commissioner of Sales Tax v. Indonational Limited, Ghaziabad 1989 UPTC 382. In the case of Commissioner of Sales Tax v. Geep Industrial Syndicate Ltd. 1989 UPTC 324 reference was also made to section 3-A (2-A), in the last paragraph, it is held that dry cell batteries are taxable at the rate of 7 per cent under sub-section (2-A) of section 3-A ever since May 20, 1976. THE said order was passed on July 21, 1979, which covers the case of the petitioner which is for assessment years 1977-78 and 1978-79. Thus, in view of this also, the issuance of notice under section 21 of the Act not only is illegal but suffers from jurisdictional error and thus not sustainable. Accordingly the said notice dated May 8, 1981, for both years that is 1977-78 and 1978-79 (annexure 5 and 6 to the writ petition) is quashed. Accordingly we allow the petition with costs. THE stay order dated June 26, 1981, is vacated. Petition allowed. .