SURAJMAL JAIN Vs. COMMERCIAL TAX OFFICER

JUDGEMENT

(1.) The petitioner carries on the business of buying and selling goods under the name and style of Messrs. Padamah Engineering Corporation of which he is the sole proprietor. He is a registered dealer under the Bengal Finance (Sales Tax) Act, 1941 (hereinafter referred to as the Bengal Act), as also under the Central Sales Tax Act, 1956 (hereinafter referred to as the Central Act). It is alleged that on or about 28th January, 1967, respondent No. 1 visited the place of business of the petitioner, searched the same, saw and signed delivery orders, chalans, etc. and reported in writing about a sister concern in the name of Messrs. Ridhkaran Surajmal, which is alleged to function from the same premises. Acting on the said written report, respondent No. 1 held, inter alia, that the dealer Messrs. Ridhkaran Surajmal effected inter-State sale on 16th July, 1966 and held the dealer, Messrs. Ridhkaran Surajmal, to be liable to pay tax from 16th July, 1966. By the said order dated 31st July, 1967, respondent No. 1 directed to issue form III from 16th July, 1966, to 31st December, 1966. By a notice dated 23rd August, 1967, issued under Section 9 of the Central Act read with Sections 11 and 14(1) of the Bengal Act the petitioner was called upon to attend before respondent No. 1 on 29th September, 1967, with accounts and documents. In the said notice, it is alleged that respondent No. 1 was satisfied on information which had come into his possession that the petitioner had been liable to pay tax under the Central Act in respect of the period 16th July, 1966, to 31st December, 1966 and that the petitioner is alleged to have failed to get himself registered. The said notice was addressed to the petitioner carrying on the business under the trade name of Messrs. Ridhkaran Surajmal. Respondent No. 1 thereafter made an order on 4th October, 1967, whereby he assessed the petitioner for a sum of Rs. 5,000 under the Central Act on an estimated turnover of Rs. 50,000 for the same period. As there was no appearance on behalf of the petitioner, the order was made ex parte. It appears from the said order of assessment that respondent No. 1 had already determined the petitioner's liability to pay tax by his order dated 31st July, 1967 and as no return was filed by the dealer the turnover was arrived at on estimate. The petitioner thereafter preferred a revision under Section 9 of the Central Act read with Section 20(3) of the Bengal Act before respondent No. 2, who by his order dated 20th January, 1968, confirmed the order of the Commercial Tax Officer dated 31st July, 1967. It appears from the order of respondent No. 2 that the petitioner was described as Messrs. Padamah Engineering Corporation. Thereafter, a notice dated 18th March, 1968, was issued under Section 9 of the Central Act read with Section 11 (4B) of the Bengal Act calling upon the petitioner to show cause why the penalty amounting to Rs. 2,000 would not be imposed for the alleged default in making the payment of tax. By an order dated 22nd April, 1968, respondent No. 1 imposed a penalty of Rs. 2,000 for the default in the payment of tax. An appeal was preferred against the said order imposing penalty and it is stated that the said appeal is still pending. On or about 12th August, 1968, a certificate under the Public Demands Recovery Act for a sum of Rs. 7,000 was filed in the office of the Certificate Officer for the default in the payment of tax of Rs. 5,000 and the penalty of Rs. 2,000 imposed under Section 11 (4B) of the Bengal Act. The petitioner has come up against the said certificate proceeding as also the order dated 31st July, 1967 and the orders dated 4th October, 1967 and 22nd April, 1968, made by respondent No. 1 and has obtained a rule nisi.

(2.) An affidavit of Sri Nitindra Chandra Sen affirmed on 14th May, 1973, has been filed on behalf of the respondents. The matter came up for hearing on 11th April, 1973. An application for amendment was made by the petitioner for incorporating the ground that the order dated 31st July, 1967, was made by the respondents without giving any opportunity of hearing to the petitioner. On 15th May, 1973, I allowed the application for amendment and the petitioner was permitted to incorporate the amendment in the petition.

(3.) The learned counsel for the petitioner has challenged the order dated 31st July, 1967, fixing the liability of the petitioner to pay tax under the Central Act from 16th July, 1966, firstly, on the ground that there is no such provision under the Central or Bengal Act for fixation of such liability except in a proceeding for assessment and, secondly, the said order has been made in violation of the principles of natural justice as the petitioner at no stage was given any opportunity of being heard before the said order was made. I asked the learned counsel for the respondents specifically the question as to the particular section under which the order dated 31st July, 1967, was passed by Sri T.K. Dutta, Commercial Tax Officer, fixing the liability to pay tax from 16th July, 1966. The learned counsel submitted that this order has been passed under Section 6 of the Central Act. It was further submitted that it is the practice of the sales tax department to pass such order under the aforesaid section in order to fix the particular date from which the dealer is held liable. It has also been submitted that the said order being in the nature of an administrative order does not require the petitioner to be given an opportunity of being heard before the making of such an order.