K. Subramaniam vs Deputy Commercial Tax Officer

Chitra Venkataraman, J.—This writ appeal is against the order of the learned single Judge dated 19.11.2004 made in W.P. No. 33494 of

2004, dismissing the writ petition preferred by the appellant herein to quash the order of assessment passed by the respondent dated 21.9.2001.

The writ appellant is an assessee under the provisions of the Tamil Nadu General Sales Tax Act, 1959. He had filed his sales tax returns for the

year 1999-2000, claiming exemption in respect of second sale of automobile spare parts. A notice of assessment was issued by the respondent

which was received on 26.2.2001. The assessee, however, did not file any objection to the notice of assessment, which has resulted in an ex parte

order of assessment dated 21.9.2001 under which, the respondent adopted best of judgment assessment method and rejected the claim for

second sale exemption and further added Rs. 1,00,000/- towards ad hoc addition. This resulted in a tax liability of Rs. 34,287/-. Apart from this,

the respondent also levied penalty of Rs. 51,431/- u/s 12(3)(a)(v) of the Tamil Nadu General Sales Tax Act, 1959. Admittedly, the appellant

herein did not file a statutory appeal challenging the correctness of the assessment made. Thus, the assessment remained confirmed and recovery

proceedings were taken by issuance of an auction notice dated 26.8.2004 under the provisions of the Act to recover a sum of Rs. 80,138/-. At

this juncture, the appellant herein preferred a writ petition in W.P. No. 33494 of 2004 before this Court for the issue of a writ of Certiorari to

quash the order of the Assessing Officer on the ground that the order of assessment was not served on the assessee to prefer an appeal on time.

By order dated 19.11.2004, this Court dismissed the writ petition on the ground that the assessee did not exhaust the appeal remedy before the

statutory authority. Hence, the present appeal.

We have gone through the records. A perusal of the order of assessment shows that the best of judgment assessment rejecting the claim for

second sale exemption and the addition were made on the assessee''s failure to appear before the Assessing Authority to lodge his objection and

to substantiate his claim for the grant of second sale exemption.

Learned Counsel for the appellant submitted that the appellant had closed down his business because of incurring heavy loss. Since the claim

was with reference to second sale exemption and the details were already furnished, he was under the bona fide impression that the proceedings

would be dropped. However, learned Counsel submitted that the assessment order was not served on the appellant to prefer a statutory appeal

and he came to know of the assessment only after the recovery proceedings were taken. Considering the same, learned Counsel submitted that the

assessment made was arbitrary.

It may be noted that the best of judgment assessment leading to addition was a result of the assessee''s default in not replying to the pre-

assessment notice. However, having regard to the fact that the assessee is stated to have closed down the business and hence could not participate

in the assessment proceedings, in the interest of justice, in order to enable the assessee to substantiate his claim, the order of the learned single

Judge is hereby set aside on terms which are as follows:

(i) The assessee shall deposit a sum of Rs. 20,000/- (Rupees twenty thousand only) on or before 14.12.2007 before the respondent herein;

(ii) The assessee shall appear before the Assessing Authority with all the relevant records and accounts pertaining to the claim for second sales

exemption on 17.12.2007 without any default. On such production of the documents and the relevant accounts, the Assessing Authority shall pass

orders in accordance with law.

It is hereby made clear that if the appellant herein fails to comply with any one of the conditions put forth above, the order passed by the learned

single Judge shall stand revived, confirming the assessment order passed, automatically against the appellant herein.

The writ appeal is disposed of accordingly. Connected W.A.M.P. No. 7524 of 2004 is closed.