Decided on March 21,1970



RAMAPRASADA RAO, J. - (1.) IN this batch of writ petitions common questions of law arise. It was agreed that it is sufficient to notice the facts in Writ Petition No. 1322 of 1966, as the relevant facts in the other cases are similar to those stated in Writ Petition No. 1322 of 1966. Mr. Srinivasan addressed arguments and it was conceded that the said arguments may be adopted as common arguments, as common contentions arise in the other writ petitions as well. We shall, however, refer to certain peculiar features in some amongst the petitions before us in the course of our judgment.
(2.) THE facts in Writ Petition No. 1322 of 1966 were as follows : The petitioners, a partnership firm, were doing business in textiles, mostly art silk and handloom goods. The petitioners are both importers and exporters. In connection with certain exports made by them they were able to secure certain import licences, which enabled them to import art silk. It is common ground that such art silk yarn imported was to be used and utilised by the petitioners in the course of their trade and manufacture of handloom cloth and that they were prohibited from selling such art silk yarn so imported. For the year ending 31st March, 1961, the petitioners filed their returns voluntarily and produced their accounts to the assessing authority and got themselves assessed in the usual way. But it should be noted that their first stand before the original assessing authority was that they imported art silk yarn and that they stocked the goods in their respective places of business within the State of Tamil Nadu and that they utilised them for the manufacture of handloom cloth. It was on this basis that the return was filed and in substantiation thereto the account books were also shown to the assessing authority, and finally the petitioners obtained exemption, to which they were entitled under the provisions of the Madras General Sales Tax Act, 1959. That the assessment was based on such representations and documentary evidence is not denied. Later it transpired that the petitioners-firm was raided by the Special Police Establishment, Madras, and in the course of such raid certain records were recovered from them. The Commercial Tax Officer, Salem, and the Deputy Commercial Tax Officer, Tiruchengode, perused the said records in the office of the Superintendent of Police, Economic and Offences Wing, Madras, as also certain statements made by the petitioners before the Commissioner of Income-tax, Central Division, Madras. On such a perusal of the records as above it was found that the petitions did not utilise the imported art silk yarn for manufacture of handloom cloth in their factory but made a different use of them, which conduct and attitude would not entitle them to the exemption originally granted by the assessing authority.
(3.) IN those circumstances the respondent issued a notice dated 15th September, 1965, and made a proposal to redetermine the total taxable turnover of the petitioners-firm for the assessment year 1960-61. In and by this notice the petitioners were given an opportunity to file their objections as also to appear in person with the relevant records at the office of the respondent on or before a notified date. From time to time the petitioners sought adjournments for filing objections and in particular the petitioners desired that the materials said to have been gathered in the office of the Superintendent of Police might be furnished to the petitioners to enable them to show cause to the memo issued. As the petitioners were not in possession of the exact copy of the details secured by the police, the petitioners were informed that special arrangements were made for the petitioners to peruse the books and the other materials secured by the police and they were particularly asked to appear on 9th December, 1965, at the office of the Superintendent of Police and peruse the said records. The petitioners' case is that though their Advocate and their representative tried to inspect the records and the other materials in the manner suggested by the respondent, it was not possible to secure full information.;

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