State Taxation Tribunal - West Bengal
Grand Smithy Works And Five Ors. vs Certificate Officer And Ors. on 24 May, 1989
Equivalent citations: [1990]79STC414(TRIBUNAL)
JUDGMENT
P.C. Banerji, Technical Member.
1. These three applications under Section 8 of the West Bengal Taxation Tribunal Act, 1987, numbered as RN-12, RN-13 and RN-14 of 1989 have been made by Grand Smithy Works and its partners and are directed against the ex parte assessments of tax, etc., made by the Commercial Tax Officer, Salkia Charge, Howrah and the certificate proceedings for realisation thereof. The application in RN-12 relates to assessment and realisation of tax dues and penalty for the four quarters ending August, 1979, amounting to Rs. 58,394.10. The application in RN-13 is concerned with assessment and realisation of tax dues and penalty for the four quarters ending August, 1980, amounting to Rs. 35,701.44. The Case No. RN-14 relates to assessment and collection of tax dues and penalty amounting to Rs. 3,88,750 for the four quarters ending August, 1981. Since all these applications are analogous, these are being dealt with by a single judgment.
2. The facts of the case may be briefly stated thus :
The Grand Smithy Works, a partnership firm, is a registered dealer under the Bengal Finance (Sales Tax) Act, 1941. The firm did not furnish quarterly returns and pay tax as required under the Act and Rules. The Commercial Tax Officer, as required under Section 11 of the Bengal Finance (Sales Tax) Act, 1941, asked for production of books, etc., by the assessee by issuing notices under form VI and fixed dates for hearing. The constituted attorney of the firm on different occasions appeared before the Commercial Tax Officer and asked for adjournments. After granting several adjournments in order to enable the firm to produce the books of accounts, the Commercial Tax Officer ultimately completed the assessments ex parte since the said assessments were going to be time-barred within a few days. The demand notices in form VII were thereafter served on the firm. As no payments were made, certificate cases were filed with the concerned Certificate Officer, who issued notices under Section 7 of the Bengal Public Demands Recovery Act, 1913, on the partners of the firm carrying on business under the trade name of Grand Smithy Works. The said ex parte assessment orders and the notices under Section 7 of the Bengal Public Demands Recovery Act are being assailed in these applications.
3. The case of the applicants is that the ex parte assessments were illegal, and due notices were not given to them before such assessments were made, nor were they informed of the assessments. They only came to know of these assessments, when notices under Section 7 of the Bengal Public Demands Recovery Act were issued by the Certificate Officer. They also allege that the assessments were arbitrarily made taking notional amount as turnover, since, during the years in question, due to general recession, power and gas shortage and severe labour unrest there was considerable reduction in production and sale of goods ; consequently there was no taxable turnover and hence they were not liable to file returns and pay any tax. They have also alleged that the assessments were barred by limitation and that since Shiva Charan Laul, one of the partners of the firm and a certificate-debtor, died on October 28, 1987, the certificate proceedings ceased to be in force and are void. Hence they prayed that the ex parte assessments and the certificate proceedings be quashed.
4. The learned State Representative, appearing on behalf of the respondents, stated that the ex parte assessments were duly made after serving notices on the applicants and, giving them an opportunity of being heard. The applicants asked for adjournments at different times and ultimately did not produce the books of accounts, etc. The Commercial Tax Officer, therefore, had to go in for ex parte assessments, since the cases were going to be time-barred shortly. As demand notices were duly served on the applicants, they could have taken recourse to appeals and revisions before the appropriate authorities, as provided for in the relevant Act. The applicants, therefore, without exhausting the remedies otherwise available to them cannot now possibly come up before the Tribunal challenging such assessments, which were made long time back, the applications being also barred by limitation as per Section 8(2) of the West Bengal Taxation Tribunal Act, 1987. He further contended that with regard to the alleged illegality in the certificate proceedings, the proper course should have been to take recourse to appeals and revisions provided for in the Bengal Public Demands Recovery Act, 1913, at the appropriate forum. Here also the applicants have not availed themselves of all remedial measures available to them. Hence the present applications are not maintainable in terms of the provisions of Section 8(3)(a) of the West Bengal Taxation Tribunal Act, 1987.
5. We shall now deal with the grounds urged before us by the learned counsel for the applicants. In order to help the court in coming to a finding with regard to the question whether the assessments were duly made and communicated to the applicants, we called for the relevant case records. These were produced in the court and the learned counsel for the applicants was given an opportunity to go through them.
6. The learned counsel for the applicants challenged the demand for payment of tax and argued that unless a notice as required under Section 10(2) of the Bengal Finance (Sales Tax) Act, 1941, was issued by the Commissioner, no tax was payable and as no such notice was issued to the applicants the question of payment of any tax by the firm did not arise. This is not the correct legal position. Sub-section (2) of Section 10 of the Act read with Rules 21 and 36 of the Rules framed under the Act provides for submission of quarterly returns and payment of tax, etc., by every registered dealer. The applicant-firm is a registered dealer and as such is required by law to furnish returns and pay tax in accordance with these statutory provisions. The question of any notice by the Commissioner, as envisaged by the learned counsel, does not arise. This argument, therefore, does not hold water.
7. The next ground pressed was that the ex parte assessments were made without complying with the provisions of law and were not made known to the applicants in time. With regard to the assessment for the four quarters ending August, 1979, a notice in form VI was issued on November 26, 1981, by the concerned Commercial Tax Officer. One Shri S.S. Lohia, constituted attorney for Grand Smithy Works, appeared in response to that notice on August 9, 1982 and on subsequent dates and every time prayed for adjournment. Finally, the concerned Commercial Tax Officer on August 2, 1983, disallowed the prayer for adjournment and made an ex parte assessment and issued demand notice in form VII on August 6, 1983. With regard to the assessment for the four quarters ending August, 1980, notice in form VI was issued on December 5, 1981. Here also Shri S.S. Lohia appeared on behalf of the applicants, and after five adjournments, prayed for on behalf of the applicants, ex parte assessment was made on July 2, 1984. Thereafter demand notice in form VII was issued on July 5, 1984.
8. For the period ending August 31, 1981, notice in form VI was issued on July 8, 1984, by the Commercial Tax Officer. In response to such notice Shri S.S. Lohia and Shri S.P. Budhia, authorised advocate, appeared before the Commercial Tax Officer and applied for adjournments on several occasions and ultimately failed to produce any books of account for which no cogent reason could be given. The Commercial Tax Officer thereafter made an ex parte assessment on August 28, 1985 and issued demand notice in form VII and handed it over to Shri S.P. Budhia. Shri Budhia also filed vakalatnama signed by Shri Shiv Kumar Agarwala, a partner, on behalf of the firm.
9. It will be evident from the facts stated above that the ex parte assessments were duly made by the Commercial Tax Officer after giving due notices to the applicants and also giving them an opportunity of being heard. AH these assessments were made before the expiry of four years from the end of the year in respect of which the assessment is made. These are, therefore, not barred by limitation, as alleged by the applicants.
10. We are not inclined at this stage to examine the basis of these assessments and to go into their merits. There must inevitably be some element of subjective estimate in a best judgment assessment. If the party had the opportunity to appear before the assessing authority, he cannot by refraining from doing so, now question the propriety of the assessment in this forum. The party had other remedies open to him. It will not be proper for the Tribunal to entertain the plea for the first time. The Tribunal has to be satisfied that the applicants have availed themselves of all remedial measures available to them under the relevant specified Act. The applicants have not availed themselves of the remedial measures, but have come up with a case of ignorance resulting from alleged non-service of notices. The plea is patently false. We have found as a fact that even though the assessments were made ex parte, but these were not done without notice. We, therefore, feel disinclined to interfere.
11. The learned counsel for the applicants when confronted with the records of the assessment cases, raised a point that Shri S.P. Budhia, authorised advocate, could not be acting on behalf of the partnership firm before the assessing officer, as only one of the partners, namely, Shiv Kumar Agarwala signed the vakalatnama. Section 19 of the Indian Partnership Act, 1932, read with Section 20 thereof defines the general extent of a partner's agency. The "implied authority" of a partner is conferred by Section 19 of the Act and the term may, by contract between the partners, extend or restrict such "implied authority" of any partner under Section 20 of the Act. In course of the hearing we had asked for production of the partnership deed. A xerox copy was produced and it is abundantly clear upon a reference to the terms thereof that instead of restricting the "implied authority" it has been affirmatively reiterated. The action of the partner, therefore, in appointing the said advocate to act on behalf of the firm fairly and squarely binds the firm and all its partners. Thus this point has no substance.
12. The contention of the applicants that since Shiva Charan Laul, one of the partners of the firm and a certificate-debtor, died on October 28, 1987, before the certificate was filed, the certificate proceedings are void and have become a nullity, is not acceptable because the certificate proceedings have been initiated against Shiva Charan Laul and other partners carrying on business under the trade name of Grand Smithy Works. The certificate proceedings are, therefore, valid and can be enforced against the surviving partners of the partnership firm who are also certificate-debtors. The death of one of the certificate-debtors does not result in the certificate ceasing to be in force. It is for the Certificate Officer to add the legal representative of the deceased certificate-debtor in the certificate and proceed against him in accordance with law as and when such a contingency arises. If the applicant has any grievance against an order of the Certificate Officer, he has the proper forum for redressal of such grievance as provided for in the Bengal Public Demands Recovery Act, 1913, itself. This Tribunal cannot interfere unless such remedial measures arc exhausted.
13. In the premises, the applications must fail and arc accordingly dismissed. No costs.
B.C. Chakrabarti, Chairman.
13. I agree.
L.N. Ray, Judicial Member.
14. I agree.