Neetha Sebastian vs Sales Tax Officer, 1st Circle, Commercial Taxes, Ernakulam and Another

C.N. Ramachandran Nair, J.—The appellant is the proprietor of a closed industrial unit. She challenged the assessment order passed by the first respondent directly in writ proceedings on the ground that it was issued in violation of natural justice. The learned single judge See page 325 supra. declined the prayer and hence this writ appeal is filed. We heard the learned counsel appearing for the appellant and the learned Government Pleader appearing for the respondent-State and also perused the documents produced by the appellant''s counsel.

In the first place there is a short credit of Rs. 90,000 which the officer has not verified, because tax credited as paid is only Rs. 1,51,950, whereas according to the appellant''s statement, tax paid is Rs. 2,44,736. The assessing officer should verify this first and give credit for the actual amount of tax paid. So far as the assessee''s challenge against the assessment order is concerned, we notice that there is a real grievance for the appellant. Because in the first round pre-assessment notice has been issued without showing break up of the turnover proposed with appropriate rate of tax. When second round notice was sent, the same was not received by the appellant because it was sent to the closed address. In any case since the business is closed during the year 2004-05, the assessing officer should have ensured that pre-assessment notice is served on the assessee before completion of assessment.

We accordingly allowed the writ appeal by vacating judgment of the learned single judge and by disposing the writ appeal as below :

(1) The appellant will produce a copy of the judgment before the assessing officer, who will issue notice of posting and hand over the same to the assessee or to her representative and on the date given by the officer, the assessee will produce the entire books of account and furnish the current address to the assessing officer for issuing pre-assessment notice to the assessee in that address. We make it clear that the assessee should not ask for adjournment and should comply with the instructions of the officer in regard to the production of books of account and also furnishing of reply to pre-assessment notice within the time fixed by the officer.

(2) The assessment should be completed afresh after giving opportunity to the assessee as above, within a period of two months from now. Recovery based on exhibit P10 will remain stayed for a period of two months from now and thereafter the tax will be recovered based on fresh assessment completed as above. However, if the assessee does not cooperate as above for completion of assessment afresh, recovery can be under the order already completed. If fresh assessment as above is made the same will supersede exhibit P10 order.

(3) If on verification the tax admitted is not paid, the assessee will first remit the balance admitted tax and thereafter the assessment will be proceeded with.

It is seen that even these days there is communication gap between the Department and the assessees. In some cases assessees close business and even thereafter notices are sent as in this case in the closed address leading to ex parte assessments which in turn give rise to litigation in court and remand and delay. In another set of cases assessees change business place and without noticing the same correspondence is made by the Department to old address. In our view if an effort is made by the Department, there will be no difficulty to trace the assessees even after closure of business or even after shifting of the business. We do not know why Department cannot collect the current telephone numbers of the assessees whether they be proprietors or, directors of companies or partners of partnership firms, etc. There will be a direction to the Commissioner of Commercial Tax to instruct the departmental officers to maintain current telephone numbers of all assessees, i.e., all registered dealers and their representatives authorised to appeal and the same is passed on whenever required among departmental officers for the purpose of enquiry. Coordination among departmental officers, particularly between check-post officers/intelligence officers and assessing officers will help prevention of evasion of tax and the assessee''s availability on phone at any time will help the officers in their work. The Government Pleader shall forward a copy of this judgment to the Commissioner of Commercial Tax for issuing immediate instructions to subordinate officers.