Punjab-Haryana High Court
M/S Hotel Skylark And Restaurant vs State Of Punjab And Others on 19 January, 2010
Bench: Ashutosh Mohunta, Mehinder Singh Sullar
GSTR No.36 of 2006 -1-
IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
GSTR No.36 of 2006
DATE OF DECISION: January 19, 2010
M/S HOTEL SKYLARK AND RESTAURANT ...APPELLANT
PVT. LTD.
VERSUS
STATE OF PUNJAB AND OTHERS ...RESPONDENTS
CORAM: HON'BLE MR. JUSTICE ASHUTOSH MOHUNTA.
HON'BLE MR. JUSTICE MEHINDER SINGH SULLAR.
PRESENT: MR.SUVIR SEHGAL, ADVOCATE FOR THE APPELLANT.
MR. PIYUSH KANT JAIN, ADDL.A.G., PUNJAB.
ASHUTOSH MOHUNTA, J.(ORAL)
The appellant has filed this appeal challenging the order (Annexure P-4) dated 4.10.2001, passed by the Sales Tax Tribunal-I, Punjab vide which the assessment orders relating to assessment year 1978-79 was upheld.
Briefly the facts of the case are that the appellant M/s Hotel Skylark and Restaurant Pvt. Ltd. is running a hotel and restaurant at Jalandhar and is a registered dealer under the Sales Tax Clause. He filed quarterly returns disclosing its gross turnover for Rs.12,16,069/- for the year 1978-79. The Assessing Authority being not satisfied with the returns filed by the appellant issued the appellant statutory notice in form S.T.-XIV under Section 11(2) of the Punjab General Sales Tax Act, 1948 and the assessment was framed by the Assessing Authority Jalandhar-II creating an additional demand of Rs.47,714/- vide his order dated 5.7.1996. Being aggrieved by the aforementioned order passed by the Assessing Authority, Jalandhar, the appellant filed appeal before the Deputy Excise and Taxation Commissioner (Appeals), Jalandhar who dismissed the appeal vide order GSTR No.36 of 2006 -2- dated 23.10.1997, and the subsequent appeal before the Sales Tax Tribunal was also dismissed. An application filed by the assessee for referring the important questions of law to the High Court for adjudication was also dismissed. Thereafter, the appellant filed an application before this Court for seeking a direction to the Tribunal to frame the questions of law and to refer the questions of law framed by the Tribunal. The High Court in STC No.1 of 2005 dated 11.7.2006, framed the following questions of law which have not been referred to this Court by the Tribunal:-
"i)Whether in the facts and circumstances of the case, order of assessment passed after a delay of 18 years suffers from the vice of inordinate delay?
ii) Whether the findings of the Tribunal, to the effect that delay of 18 years in passing the order of assessment had been logically explained, are perverse especially when no material to support the same is available on record?
iii) Whether the assessment order dated 30.10.1996 was not under section 11(4) of 11(5) of the Punjab General Sales Tax Act, 1948?
iv) Whether the Tribunal is correct in law in rejecting claim for rebate under Rue 29(xii) for purchase of tax suffered cooking gas used in production/preparation of food catered to consumers in restaurant, sales whereof had been subjected to sales tax by the Assessing Authority?
v) Whether the assessee company would be liable to payment of sales tax in case the same has not been charged/collected from the costumers while catering the food GSTR No.36 of 2006 -3- in restaurant?
vi) Whether penalty provisions contained in Section 10(6) of the Punjab General Sales Tax, 1948 are attracted in the facts and circumstances of the case?"
A perusal of the reference order shows that with regard to the first question as to whether the order of assessment passed after a delay of 18 years suffers from the vice of inordinate delay, in the present case, the assessee had filed his return for the year 1978-79. The Assessing Authority passed the assessment order on 5.7.1996, creating an additional demand of Rs.47,714/-. The additional demand was subsequently reduced by the Assessing Authority by passing the rectification order.
Counsel for the appellant submits that despite the fact there was no stay by any Court, the Assessment order was passed after an inordinate delay of 18 years. He has placed reliance on Madan Lal Arora Vs Excise and Taxation Officer, (1961) 12 STC 387, wherein it has been held by the Apex Court that "power to make the best judgement assessment could be exercised within a period of three years mentioning in the sub-section and the three years had to be counted from the end of each quarter in respect of which the returns had been filed". Learned counsel has also placed reliance on State of Punjab and others vs. Bhatinda District Co-op. Milk P. Union Ltd., reported as (2007) 10 VST 180 (SC), wherein Hon'ble Supreme Court has defined the reasonable period. It has been held that reasonable period can be stretched from 3 to maximum of 5 years. Learned counsel submits that there is no plausible explanation by the Department to show as to why 18 years were taken to pass the assessment order.
Counsel for the respondents, however, submits that the GSTR No.36 of 2006 -4- assessment could not be completed, because the assessment case of hotels and restaurants were kept pending in view of the litigation going on in the High Court and Supreme Court. Accordingly, the case of the appellant was also kept pending by the Assessing Authority.
We have heard counsel for the parties.
In the present case, the assessee had filed his quarterly returns for the assessment year 1978-79, however, the Assessing Authority, Jalandhar passed the assessment order on 5.7.1996. There could not have been any possibility of having passed any order of assessment, if there was any stay order of the Court. As the assessment order was passed after an inordinate delay of 18 years, therefore, we are of the considered opinion that the assessment for the assessment year 1978-79 has to be annulled and the same is annulled. Accordingly, Question No.1 is answered in favour of the assessee and against the Revenue.
In view of the aforementioned discussion and answer to question No.1, we find no necessity to adjudicate upon other questions of law framed in this case.
As a result of the aforementioned discussion the assessment order relating to the assessment year 1978-79 against the assessee is annulled and the penalty imposed on the assessee is also quashed. The reference is accordingly disposed of and answered in the aforementioned terms against the revenue.
(ASHUTOSH MOHUNTA)
JUDGE
January 19, 2010 (MEHINDER SINGH SULLAR)
Gulati JUDGE