MILAN SUPARI STORES Vs. COMMISSIONER OF COMMERCIAL TAX

JUDGEMENT

(1.) THIS letters patent appeal has been preferred by the assessee-appellant against an order dated September 16, 2003 passed by learned single Judge dismissing the writ petition (W. P. No. 674 of 2002) while holding that a notification issued under Sub-section (9) of Section 27 of the Madhya Pradesh Commercial Tax Act, 1994 (hereinafter referred to as "the MPCT Act") extending the period of limitation would not only cover the limitation prescribed under Sub-section (8) of Section 27 but it would also cover the one provided under proviso (a) of Sub-section (8 ).

(2.) THE appellant's case, in brief, is that it is a partnership firm engaged in the business of purchase and sale of supari, elaichi and khopra, etc. The firm is a registered dealer under the provisions of the Madhya Pradesh General Sales Tax Act, 1958 (for short "the MPGST Act") now known the Madhya Pradesh Commercial Tax Act, 1994, the Central Sales Tax Act, 1956 and the M. P. Entry Tax Act, 1976. The appellant's original assessments for the period from April 1, 1978 to March 31, 1979 and April 1, 1979 to March 31, 1980 though were completed by the then assessing authority but subsequently they were reopened Under Section 19 (1) of the MPGST Act, 1958 on the basis of a report of a Flying Squad forwarded to the assessing authority. The said report was prepared and forwarded by the Flying Squad Authorities purportedly exercising powers Under Section 29-D of the MPGST Act, 1958. It appears that though on the basis of the said report, reassessment proceedings were completed by the assessing authority but a copy thereof was not supplied to the appellant nor was it given an opportunity to cross-examine the witnesses who deposed against it and were relied upon by the department for reassessment. The reassessment proceedings were completed, vide the order dated September 14, 1984. It is further the appellant's case that similar assessments were also done on the basis of the same report of the Flying Squad for the period from April 1, 1980 to March 31, 1981, vide an order also passed on September 14, 1984. However, assessment done in respect of the period 1980-81 was different from the earlier assessments, inasmuch as this assessment was an irregular assessment and it was not done Under Section 19 (1) of the MPGST Act. Being aggrieved by the aforesaid assessments, the appellant preferred appeals before the first and the second appellate authorities, who however, upheld the order of the assessing authority passed on the basis of the Flying Squad's report. Thereafter the appellant filed a reference application before the Board of Revenue Under Section 44 (1) of the MPGST Act, 1958, which referred the questions of law to this Court for opinion, seemingly, on three points, namely; (i) as to whether the dealer was entitled to have an opportunity to cross-examine the witnesses who had deposed against him so as to meet the allegations levelled in the inspection report of the Flying Squad; (ii) as to whether there could be a reassessment against the original assessment order against which appeals had already been filed and disposed of; and (iii) as to whether the burden of explaining, proving and reconciling the information discovered by the Flying Squad against the dealer-appellant lay upon it.

(3.) A division Bench of this High Court vide the order dated October 16, 1996 passed in Misc. Civil Case No. 547 of 1992 and Misc. Civil Case No. 389 of 1994 only answered the Question No. 1 in favour of the assessee and in view of this answer, the court declined to answer the questions Nos. 2 and 3 and the same were not pressed before the court. The court further held that it was necessary for the authority to afford the opportunity of cross-examination of witnesses by the appellant so as to make the proceedings in conformity with Section 19 (1) of the MPGST Act, 1958 which reads as under: 19. Assessment of turnover escaping assessment.-- (1) Where an assessment has been made under this Act or any Act repealed by Section 52 and if for any reason any sale or purchase of goods chargeable to tax under this Act or any Act repealed by Section 52 during any period has been under-assessed or has escaped assessment or assessed at a lower rate or any deduction has been wrongly made therefrom, the Commissioner may, at any time within five calendar years from the date of order of assessment, after giving the dealer a reasonable opportunity of being heard and after making such enquiry as he considers necessary, proceed in such manner as may be prescribed to reassess within a period of two calendar years from the commencement of such proceedings, the tax payable by such dealer and the Commissioner may, where the omission leading to such reassessment is attributable to the dealer, direct that the dealer shall pay, by way of penalty in addition to the amount of tax so assessed, a sum not exceeding that amount. Looking to the above provisions, this Court held that the Tribunal committed an error of law in holding that a reasonable opportunity had been afforded to the assessee for meeting the allegations against it based on an inspection report of the Flying Squad and also in further holding that there was no necessity to afford it an opportunity to cross-examine witnesses. Thus, the court found that the Tribunal decided the case in a manner being contrary to the provisions of A Section 19 (1) of the MPGST Act, 1958.