AMIR CHAND SETHI AND SONS Vs. ASSESSING AUTHORITY

JUDGEMENT

(1.) M /s. Amir Chand Sethi and Sons carrying on business at Amritsar, has filed the present writ petition under Articles 226/227 of Constitution of India for the issuance of a writ in the nature of certiorari against the respondent-authorities praying for the quashment of the orders Annexures P-2, P-5 and P-8.

(2.) THE case set up by the petitioner is that respondent No. 1, Assessing Authority, Amritsar illegally made sales-tax assessment for the year 1966-67 on the basis of best judgment assessment on 14. 5. 1975, vide which the request of the petitioner was declined to summon the proprietor of M/s. Hari Chand Narinder Kumar of Amritsar from whom the Department has alleged that the petitioner made purchases worth Rs. 11,60,917. 17 P. Against the order of respondent No. 1 appeal was filed before respondent No. 2. Transfer application was also filed. In spite of the filing of the appeal and transfer application against respondent No. 1 a penalty under Section 10 (7) of the Punjab General Sales Tax Act was imposed upon the petitioner firm creating an additional liability of rupees one lac by way of penalty. The petitioner filed an appeal against the orders Annexure P-1 and P-2 before respondent No. 2 who quashed the assessment order on the ground of limitation vide order Annexure P-3. Notwithstanding the fact that assessment order were set aside and it was found that Assessing Authority was not justified in making the assessment, still respondent No. 2 dismissed the appeal of the petitioner against the imposition of the penalty vide order dated 8. 1. 1980 Annexure P-5. Against the order of respondent No. 2 another appeal was preferred before respondent No. 3 who passed orders dated 3. 11. 1980 calling upon the petitioner to deposit Rs. 40,000.00 before his appeal could be heard on merit. Against the orders Annexure P-2, P. 5 and P. 8, the present writ petition has been filed on the grounds that the assessment order had already been set aside by respondent No. 2 in the appeal and in these circumstances the penalty could not be imposed upon the petitioner under section 10 (7) of the Act amounting to rupees one lac. The maximum jurisdiction to impose penalty could not exceed 1-1/2 times the amount of tax which had been assessed or liable to be assessed. The best judgment assessment of the Assessing Authority had been set aside and in these circumstances the levy of the penalty of rupees one lac was without jurisdiction.

(3.) REJOINDER was filed by the petitioner in which he reiterated his averments made in the writ petition while denying those of the written statement and the only point which survives for determination in the present writ petition is whether the impugned orders Annexures P-2, P-5 and P-7 can be set aside or not?'