Kerala High Court
P.S. Abdul Majeed vs Agricultural Income-Tax And Sales Tax ... on 4 January, 1994
JUDGMENT T.L. Viswanatha Iyer, J.
1. The orders impugned, namely, exhibits P-4, P-7 and P-9, are unsustainable in law, as being passed in gross violation of the principles of natural justice. The matter pertains to the assessment to tax under the Kerala Agricultural Income-tax Act, 1950, on the petitioner for the assessment year 1983-84. The original order of assessment, exhibit P-1, was completed on August 7, 1984, on a yield of 250 kilograms which was reduced in appeal to 240 kilograms by the order, exhibit P-2, followed by the revised order, exhibit P-3. Thereafter and on the basis of certain information alleged to have been obtained from cardamom auctioneers, the order of reassessment, exhibit P-4, was completed on March 4, 1989, estimating the yield of cardamom at 481 kilograms, that is making an addition of 241 kilograms to the yield. The petitioner had objected to the proposed reopening and the addition and had very categorically stated that he had not made the alleged sale through the auctioneers. He also prayed for an opportunity to cross-examine the auctioneers, whose books are alleged to have disclosed sales of 241 kilograms of cardamom by him. But the assessing authority in the order, exhibit P-4, proceeded as if the books of the auctioneers were the last word on the subject, as if they had to be accepted as authentic and refused the petitioner's prayer for cross-examination. It was on that basis that he completed reassessment by exhibit P-4 which, as stated earlier, was confirmed in appeal by the order, exhibit P-7, and in revision by the order, exhibit P-9. The order, exhibit P-9, to a certain extent does not make sense in that the Deputy Commissioner speaks of claim regarding drought while the main thrust of the petitioner's case was regarding the reliance placed on the auctioneers' records. Whatever that be, the revision petition was dismissed and the petitioner is in this court under Article 226 of the Constitution of India.
2. I may also mention at this stage that there were two inspections of the petitioner's holdings on November 23, 1981, and on September 19, 1985, before and after the assessment year in question, when the inspecting authorities estimated the yield of cardamom from the petitioner's holdings at 180 kilograms. The order of reassessment was made without any reference to either of these inspection reports, which have been produced and marked by the petitioner as exhibits P-5 and P-6, but merely on the strength of the entries in the auctioneers' records. Reliance on the auctioneers' records and treating them as if they were conclusive and as gospel truth is doing violence to the principles of natural justice. The petitioner had in fact questioned the correctness of those records and stated that he had not sold any cardamom to the extent of 241 kilograms as suggested by the assessing authority through the auctioneers. He denied the sales in toto. He also prayed for an opportunity to cross-examine the auctioneers. When such a request was made it was incumbent on the officer to afford opportunity to the assessee to cross-examine the authors of those books as was laid down by this court in K.T. Shaduli v. State of Kerala [1972] 29 STC 44, which was confirmed by the Supreme Court in State of Kerala v. K.T. Shaduli Yusuff [1977] 39 STC 478. Failure to accede to the petitioner's request to cross-examine the auctioneers is denial of reasonable opportunity to the petitioner to put forward and prove his case, which is the desideratum of a quasi-judicial enquiry which an assessing authority is expected to hold. The petitioner has thus been denied the reasonable opportunity which was due in law, in relation to the assessment, and that is sufficient to vitiate the order, exhibit P-4, which is based merely on the auctioneers' records. The confirmation thereof by exhibits P-7 and P-9 does not have any sanctity since confirmation of a nullity as exhibit P-4, an order passed in violation of the principles of natural justice, is only a nullity. Exhibits P-4, P-7 and P-9 are therefore liable to be quashed on this sole ground. I do so.
3. If the first respondent intends to proceed against the petitioner with the reassessment for the year 1983-84, which I feel is misconceived at this distance of time, he should summon the auctioneers in question who had made the tell-tale entries in their books pertaining to the petitioner and afford the petitioner an opportunity to cross-examine them in relation to those books. If the authors of the entries at the relevant time are not available, the entries cannot be relied on for any purpose whatsoever in the absence of an opportunity to the petitioner to cross-examine them. Whether those entries are still reliable as evidence against the petitioner is a matter which will have to be adjudicated upon after affording such opportunity to the petitioner to cross-examine the authors of those books.
4. The original petition is, therefore, allowed. There will be no order as to costs.