BANSI RICE MILLS Vs. STATE OF HARYANA

JUDGEMENT

(1.) THIS is a petition for quashing of the orders dated May 7, 1998 and March 31, 2000 passed by the Deputy Excise and Taxation Commissioner -cum -Revisional Authority, Karnal, (respondent No. 3) and Sales Tax Tribunal -II, Haryana (respondent No. 2) respectively in the proceedings initiated against the petitioner under Section 40(1) of the Haryana General Sales Tax Act, 1973 (for short, 'the Act').

(2.) THE petitioner is registered as a dealer under the Act. It is engaged in the business of purchase of paddy and sale of rice. The quarterly returns filed on its behalf for the assessment year 1994 -95 were accepted by the Excise and Taxation Officer -cum -Assessing Authority, Karnal, who passed order dated December 6, 1996 declaring the tax liability in respect of consignment sales as nil. After about one year and five months, respondent No. 3 issued notice dated July 31, 1997 under Section 40(1) of the Act proposing suo motu revision of the assessment order and vide order annexure P5 dated May 7, 1998, he held that the petitioner liable to pay tax amounting to Rs. 51,578 on consignment sales. He also levied interest amounting to Rs. 43,236 under Section 25(5) of the Act. The appeal filed by the petitioner against that order was partly allowed by respondent No. 2 and the case was remanded to respondent No. 3 with the direction to work out tax liability excluding the purchase tax element from the amount received by the petitioner. However, the levy of tax of consignment sales was upheld.

(3.) THE respondents have raised an objection to the maintainability of the writ petition on the ground that the petitioner has failed to avail of the alternative remedy of reference under Section 42 of the Act. On merits, they have averred that the order of assessment passed by respondent No. 3 does not suffer from any legal infirmity because he had initiated action under Section 40(1) of the Act in exercise of his suo motu jurisdiction and the audit report did not constitute the sole basis of his decision to revise the order of assessment. The levy of interest has been justified on the strength of the decision of the Supreme Court in Calcutta Jute Manufacturing Co. v. Commercial Tax Officer [1997] 106 STC 433.