G M ZAROO Vs. COMMISSIONER, SALES TAX

JUDGEMENT

(1.) ORDERS dated 21.7.1983, 20.9.1983 and 31.5.1984 are impugned in this writ petition. By a writ of certiorari they are prayed to be quashed. The facts pleaded in the petition lie in brief compass.

(2.) THE petitioner is dealing in manufacture and sale of guns under the name and style of M/S Zaroo Gun Factory. He is said to have set up a small scale industry which is registered with the Directorate of Industries and Commerce. Liability of the petitioner to pay the sales lax is to be determined by the respondents under the provisions of Sales Tax Act and the notifications issued there under. It is contended that the assessing authority has not assessed the sales tax in accordance with law but its assessment was at whims of the assessing authority. Petitioner is said to have been told that sales tax was recoverable from the item manufactured by him on the second counter sale, i. e from the dealers. In 1981 no sales tax was recovered from the petitioner" but liability was fixed on registered dealers. During the accounting year 1978 -79 a dealer namely M/S GM Hab -ullah was assessed to sales tax on account of sale of guns manufactured and sold by the petitioner to said person. Petitioners liability was fixed for the payment of sales tax for sale of guns to the said dealer.

(3.) PROCEEDING on the assurance and practice of the department that sales tax is to be recoverable from the dealers and not from the manufacturer petitioner did not charge or collect any sales tax from the sale of the guns manufactured by him. Petitioner, however, was served with a notice under section 7 (2) of the General Sales Tax Act dated 31.12.1982 by the respondent No : 3 whereby he was asked to furnish the amount of gross and texable turn over as recorded by the petitioner in his books of accounts and other records to enable the respondent No : 3 to re -assess the tax liability of the petitioner. This was done because in the opinion of the respondent No : 3, there has occasioned an escapement of tax liability which was brought to the light by the audit party during the course of audit. In response to the said notice petitioner appeared before the respondent No : 3 and objected to the proceedings of the re -assesment on the ground that these proceedings were without authority, law and against the principles of law. The respondents, however, did not agree with the petitioner and they passed orders determining the sales tax liability of the petitioner which is said to be misconceived.