COMMISSIONER OF SALES TAX Vs. RATLAM STRAW BOARD MILLS PRIVATE LIMITED

JUDGEMENT

(1.) BY this reference under Section 44 of the Madhya Pradesh General Sales Tax Act, 1958 (hereinafter referred to as "the Act"), the Board of Revenue has referred the following questions of law to this Court for its opinion :

(2.) THE material facts giving rise to this reference briefly are as follows: The assessee was assessed to sales tax by order dated 27th May, 1961, by the Regional Assistant Commissioner of Sales Tax, Indore, for the period 1st July, 1957, to 31st March, 1958. In the course of assessment proceedings the assessing authority accepted the declarations in C form furnished by the assessee in accordance with the provisions of Section 8 (4) of the Central Sales Tax Act, 1956. The Commissioner, in exercise of his powers under Section 39 (2) of the Act, issued a notice to the assessee to show cause why the declarations furnished by him should not be held to be invalid as in those declarations the number and date of registration of the dealers were not mentioned. The assessee appeared and produced certified copies of the registration certificates of the purchasing dealers before the Commissioner. However, the Commissioner held that the declaration forms were liable to be rejected. The Commissioner therefore held that the order of assessment was erroneous and prejudicial to the interests of the revenue. Aggrieved by the order passed by the Commissioner the assessee preferred an appeal before the Board of Revenue. The learned Member of the Board found that the defect in the declaration forms was cured in the circumstances of the case. The learned Member therefore directed that the declarations furnished by the assessee be accepted and assessment be made afresh on that basis. At the instance of the department the Board of Revenue has referred the aforesaid questions of law to this Court for its opinion.

(3.) THE learned counsel for the department conceded that in view of the decision of the Full Bench of this Court in Commissioner of Sales Tax, M. P. v. Darasha Mancherjee and Sons, Mhow [1981] 47 S. T. C. 251 (F. B.) [misc. Civil Case No. 308 of 1976 decided on 18th August, 1980 (Indore)], the reference should be answered in favour of the assessee and against the department. In that case the Full Bench has held as follows : The rejection of declarations, it is not disputed, will result in denying the dealer the benefit of the concessional rate of tax. The rejection would, therefore, adversely affect a dealer who claimed the benefit of the concessional rate. The order of rejection cannot be passed by an assessing authority arbitrarily. It is a quasi-judicial act and it is thus inherent in the very nature of an order, expressly or impliedly rejecting the declaration furnished by the dealer, that it should be passed after giving the dealer an opportunity of being heard in the matter. Such opportunity cannot be held to be an empty formality but would necessarily carry with it the opportunity to remove defects in the declaration to the satisfaction of the assessing authority. Denial of such opportunity would mean that even a defect in the declaration arising out of an inadvertent mistake or omission in the declaration could not be cured.