Kanaka Durga Winres vs The Commissioner of Commercial Taxes

S.R. Nayak, J.—Heard the learned counsel for the appellant and the learned Special G.P. for Taxes.

In this special appeal, the question that is required to be decided at the threshold is whether the revisional order passed by the Commissioner of Commercial Taxes, the 1st respondent herein dated 4.6.1998 was in conformity with the principles of natural justice and fair play in action and Rule-58 of the Andhra Pradesh General Sales Tax Rules (for short the "APGST Rules). If we find that there was infraction of the principles of natural justice and Rule-58 of the APGST Rules, there is no need to for us to take up the adjudication on merits. In that view of the matter, we proceed to consider the threshold question.

The appellant is an assessee on the rolls of the respondent. The assessment of the appellant-assessee for the assessment year 1992-93 under the APGST Act was taken up for revision u/s 20(1) of the APGST Act by the respondent by issuing a show cause notice dated 1.1.1997. Admittedly this notice was not served on the appellant-assessee in person. According to the respondent, the notice was served in the mode prescribed in clause- (d) of Rule-58 of the APGST Rules i.e. by affixture. After the respondent passed the revisional order on 4.6.1998, the Commercial Officer passed the consequential order dated 26.8.1998 and that consequential order was also served on the assessee in person on 10.4.1999 at his present address Tallapalem village, Tangutur Mandal, Prakasham District. In the interregnum, admittedly the respondent issued notice dated 12.1.1998 whereby he sought to revise the order of the Appellate Deputy Commissioner, not only in respect of Rupees 10, 04,240/-, but also the tax liability determined by the Commercial Tax Officer to an extent of 1.3 crores in to to.

According to the appellant-assessee, this notice was never served on it. It is also not the case of the respondent-department that the second show cause notice dated 12.1.1998 was served on the counsel who appeared on behalf of the petitioner before the Appellate Deputy Commissioner. It is the further case of the respondent that the second show cause notice was served on the petitioner by affixture on 22.1.1998.

In the premise of these facts, Sri S.R. Ashok, learned senior counsel for the appellant would contend that the impugned order made by the Commissioner on 4.6.1998 should be condemned as violative of the principles of natural justice as well as Rule -58 of the APGST Rules.

On the other hand, the learned Special G.P. for Taxes would maintain that the procedure contemplated under Rule-58 of the APGST Rules was strictly adhered to by the Department and it cannot be said that the impugned revisional order made by the Commissioner on 4.6.1998 is in violation of principles of natural justice or Rule-58 of the APGST Rules.

Rule-58 of the APGST Rules is as under:

The service on a dealer 1(...) of any notices, summons, order or proceedings under the Act or under these Rules may be affected in any of the following ways; namely

a) By giving or tendering it to such dealer 1(...) or his manager or agent, or

b) If such dealer 1(...) or his Manager or his agent is not found by leaving it at his last known place of business or residence or by giving or tendering it to adult member of his family or

c) If the address of such dealer 1(...) is known to the assessing authority, by sending it to him by registered post, or 2 (and if it is returned unserved, it shall be put in notice board of the office of the assessing authority or the notice board in the office of the local Chamber of Commerce or traders association, and it shall be deemed that the said notice or summons or proceedings are served on the dealer, and action shall be taken in pursuance thereof accordingly).

d) If any or all the modes aforesaid is not practicable by affixing it in some conspicuous place at his last known place of business or residence.

The mode of service provided under clause-(d) of Rule 58 of the APGST Rules can be resorted to only if or all of the modes prescribed under clause a,b and c are not applicable. Therefore, if the authorities resorts to the mode prescribed in clause-(d), the first thing to be shown before the court is that the other modes prescribed under Rule 58 of the APGST Rules, were not applicable and therefore, the department was left with no other alternative, but to proceed under clause-(d) . If that is the Rule position, the only thing to be seen is whether the records of the respondent would satisfy the test of non practicability of mode envisaged in clause-(d) of the APGST Rules, so as to permit the department to resort to the mode of service by way of affixture. In this premise we pointedly asked the learned Special G.P. for Taxes whether any thing exists in the records, to show that the Commercial Tax Officer has recorded his satisfaction as none of the modes specified in clauses-a, b and c of Rule-58 of the APGST Rules were impracticable, and therefore, he though it appropriate to serve the notice on the appellant assessee as provided under clause- (d), Since there is total lack of satisfaction recorded by the Commercial Tax Officer as required under clause-d, the resort to clause-(d) can not be upheld.

Be that as it may, the re-assessment order passed by the Commissioner on 4.6.1998 is also required to be condemned for any reason. We say this because in the counter filed on behalf of the department not a word is said about the allegations made by the appellant-assessee that the second show cause notice dated 12.1.1998 proposing to revise the order of the Commercial Tax Officer to an extent of 1.3 cores tax liability. It is not the case of the respondent that a copy of the said notice was served on the General Power of Attorney of the appellant before the Appellate Deputy Commissioner. We are satisfied that the respondent authorities have not taken appropriate steps to serve notice on the effected interest of the assessee herein. In that view of the matter, we hold that the order made by the Commissioner on 4.6.1998 is in violation of the principles of natural justice and Rule-58 of the APGST Rules.

In that view of the matter, we allow this appeal and set aside the revisional order made by the Commissioner of Commercial Taxes dated 4.6.1998. The proceedings shall stand remitted to the respondent with a direction to dispose of the same afresh after giving reasonable opportunity to the appellant-assessee to have his say in the matter. It is agreed upon by the parties that the appellant-assessee would file objections to the proposed revision before the end of August 2001. We grant time till the end of August 2001 to the appellant-assessee to file his objections if any to the proposed revision initiated by the Commissioner vide his show cause notice dated 1.1.1997 as well as 12.1.1998. On such objections being filed, the Commissioner is directed to consider the same and pass appropriate order after giving opportunity to the appellant-assessee of being heard. In view of the statement made by both sides, there is no need for the respondent to issue fresh notice to the appellant. No costs.