SETH PAMANDAS SINDHI Vs. STATE OF MADHYA PRADESH

JUDGEMENT

(1.) THIS is an application under Article 226 of the Constitution for the issue of a writ of certiorari for quashing a best judgment assessment made by the Assistant Commissioner, Sales Tax, Bilaspur, under Section 18 (6) of the Madhya Pradesh General Sales Tax Act, 1958, assessing the petitioner to sales tax of the amount of Rs. 1,00,363-10-0 and imposing on him a penalty of Rs. 20,000.

(2.) THE material facts are that during the period from 1st March, 1958, to 30th August, 1960, the petitioner had taken several contracts for the supply of ballast to the South Eastern Railways. According to the applicant, his principal place of business was Raigarh. This statement has been denied by the opponents, who say that the petitioner's principal place of business at all relevant times was Bilaspur. The applicant did not get himself registered as a dealer either under the Central Provinces and Berar Sales Tax Act, 1947, or the M. P. General Sales Tax Act, 1958. When it came to the notice of the Sales Tax Officer, Raigarh, that the petitioner had carried on business of supplying ballast to the railway administration without registration as required by Section 8 of the Act of 1947, he initiated proceedings under Section 11 (5) of that Act which provided for best judgment assessment on a dealer liable to pay tax under the Act in respect of any period and who had failed to apply for registration. The Sales Tax Officer, Raigarh, assessed the petitioner to a tax of Rs. 8,163-7-9 for the period from 1st March, 1958, to 30th June, 1958, and imposed on him a penalty of Rs. 2,000. Subsequently, the Sales Tax Authorities learnt that the petitioner was carrying on business at Raipur and Bilaspur also. On investigation they learnt that the petitioner's principal place of business of supplying ballast to the railway administration was Bilaspur. Thereupon the Assistant Commissioner, Sales Tax, Bilaspur, issued a notice to the petitioner under Section 18 (6) of the M. P. General Sales Tax Act, 1958, in form XVI for best judgment assessment and calling upon him to appear and to produce books of accounts and documents stated in the Schedule to the notice in respect of the period from 1st March, 1958, to 30th August, 1960. The notice also directed the applicant to show cause why a penalty should not be levied against him. It was stated in the notice :you being a dealer liable to pay the tax under the Madhya Pradesh General Sales Tax Act, 1958, in respect of the period from 1st March, 1958, to 30th August, 1960, have failed to apply for registration and thereby rendered yourself liable to be assessed to the best of judgment and having wilfully failed to apply for registration, have made yourself liable to penalty under Section 18 (6 ). In response to this notice, the petitioner appeared before the Assistant Commissioner in the beginning sometimes through a counsel and sometimes through a representative. Later on he failed to put in any appearance. He did not produce any account books or documents which he was asked to produce by the notice under Section 18 (6 ). The Assistant Commissioner collected information about the extent and value of the ballast supplied by the applicant to the railway administration from the railway authorities. The applicant was made aware of this information and was also asked to reconcile the statement of turnover given by him with the information secured from the railway authorities. He made no effort in that direction. Ultimately the Assistant Commissioner determined the petitioner's total turnover for the period from Ist March, 1958, to 30th August, 1960, at Rs. 28,000,00 and assessed him to a tax of Rs. 1,00,363. A penalty of Rs. 20,000 for failure to get registered was also imposed on the applicant.

(3.) THE applicant assails the assessment made by the Assistant Commissioner, Bilaspur, on the grounds (i) that the Sales Tax Officer, Raigarh, having already assessed him under Section 11 (5) of the C. P. and Berar Sales Tax Act, 1947, and having imposed a penalty of Rs. 2,000 for failure to get registered for the period from Ist March, 1958, to 30th June, 1958, the Assistant Commissioner, Sales Tax, Bilaspur, had no jurisdiction to initiate proceedings under Section 18 (6) of the Act of 1958 in respect of the period from Ist March, 1958, to 30th August, 1960, and that in any case he could not make a fresh assessment for the period from Ist March, 1958, to 30th June, 1958, in respect of which he had already been assessed by the Sales Tax Officer, Raigarh ; (ii) that the contracts taken by him were not contracts for sale or supply of goods but were "contracts of work "; that the supply of ballast was not a sale to the railway administration under the terms and conditions of the various contracts ; (iii) that the Assistant Commissioner had wrongly included in the turnover the receipts of the S. P. Consolidated Engineering Co. (P.) Ltd. , which was altogether a different legal entity ; and (iv) that the best judgment assessment made by the Assistant Commissioner was not based on any information or material and that the Assistant Commissioner did not disclose to him the material obtained by him from the railway authorities and did not give the petitioner any opportunity to rebut that material and thus in making the assessment the Assistant Commissioner acted contrary to the principles of natural justice.