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C. Maharaj And Sons vs Sales Tax Officer Iv And Ors.

High Court Of Judicature at Allahabad|17 August, 1964

JUDGMENT / ORDER

ORDER S.C. Manchanda, J.
1. These are four writ petitions two against the assessment orders and recovery proceedings under the U.P. Sales Tax Act for the assessment years 1958-59 and 1959-60 and the other two for the corresponding Central Sales Tax assessments and recovery proceedings.
2. The facts leading up to these petitions are these : The petitioner was dealing in iron and steel goods in the name and style of M/s. C. Maharaj and Sons, Loha Mandi, Agra, and was the sole proprietor of the business. It is alleged that the business was carried on only till 5th April, 1961. The enquiries made by the Sales Tax Officer also confirmed that the business was closed since a long time.
3. The relevant years of assessment are 1958-59 and 1959-60. The assessments were made on the 23rd of March, 1963, and 28th of November, 1963, respectively. There is no explanation as to why the assessments were not made promptly but were delayed. Be that as it may, the petitioner claims that he had no knowledge of these assessments, which were made ex parte and without notice to him. The first intimation that the petitioner had of any proceedings having been taken against him was on the 29th of March, 1964, when a Kurk Amin from the sales tax collection staff had come to the petitioner and demanded Rs. 343-45 nP. and Rs. 440 for the relevant assessment years under the U. P. Sales Tax Act and also made demands of Rs. 342-50 and Rs. 560 in respect of the Central sales tax. The Kurk Amin was informed by the petitioner that he had closed down the business on 5th April, 1961, and there were no sales tax dues to be paid by him. The Amin asked the petitioner to get the matter clarified from the Sales Tax Officer.
4. On the 30th of March, 1964, the petitioner addressed a letter to the Sales Tax Officer narrating that the Kurk Amin had come to him for recovery of the dues but:
I do not know how this demand has been created since I never received any notice to appear for the years 1958-59 and 1959-60 nor any assessment order has ever been served on me.
5. He also asked for copies of the assessment orders to be supplied to him. On the 31st of March, 1964, the petitioner received copies of the assessment orders but no attempt seems to have been made to enlighten him as to whether any service was effected on him or not and if so what that mode of service was.
6. Before the copies of the assessment orders were received, the petitioner had applied and inspected the record and according to him, to his utter surprise, discovered that ex parte assessments had been made. The ex parte assessment order for 1958-59, inter alia, reads :
A notice under Section 21 was, therefore, issued calling the dealer on 2nd March, 1963. The note of the process-server on the notice shows that the dealer refused to accept the notice and hence it was affixed at the last known place of the assessee. On due date none appeared and hence the case was reserved for ex parte order.
The dealer did not file any information regarding the closure of the business and hence it was considered fit to decide the case after spot enquiry. I, therefore, made enquiries in the market on 21st March, 1963. The shop of the dealer was found locked and it was reported by the neighbouring dealers that it has been closed since long. It was further reported that Sri Ram Babu Sharma, proprietor of the firm is now in the service of M/s. Khub Chand Sampat Ram, a firm dealing in iron and steel goods. Enquiries were, therefore, made at the firm where Sri Ram Babu Sharma was found present. It was stated by Sri Ram Babu Sharma, that he is in service of M/s. Khub Chand Sampat Ram, with effect from 5th April, 1961, and that no business in the name of M/s. C. Maharaj and Sons was conducted after that date. It was stated that he used to deal in wire and iron goods. He stated to have closed the business due to losses, and sales in the year 1958-59 were stated very less as compared to the previous year. In 1959-60 only stocks of 1958-59 were sold....
7. In paragraph 9 of the affidavit by the petitioner, which is sworn on personal knowledge it is stated that the Sales Tax Officer who had found him in the service of M/s. Khub Chand Sampat Ram, Loha Mandi never asked him to appear before him in connection with the assessment proceedings of M/s. C. Maharaj and Sons. The reply thereto is contained in parapraph 10 of the counter-affidavit and it is to say the least vague and evasive. This reads:-
It is submitted that although Chandu Lal, the Sales Tax Officer, asked the petitioner to appear before him. in connection with the assessment proceedings, but a notice under Section 21 was issued to the dealer calling him on 2nd March, 1963, which he refused to receive.
8. This paragraph of the counter-affidavit is not sworn on personal knowledge but on information derived from a perusal of the relevant record. No attempt was made to annex a copy of the relevant record to the counter-affidavit. The statement made is manifestly vague as no date is mentioned as to when the Sales Tax Officer had asked the petitioner to appear before him. Such a statement would also be in s-111 the teeth of the facts stated in the assessment order which makes no mention of the petitioner having been personally asked by the Sales Tax Officer at any time or, when he found him working as an employee of M/s. Khub Chand Sampat Ram, to appear before him. There is little or no excuse for the department not to be precise and definite in the statements that are made in the counter-affidavit as the relevant records are with them. Such vagueness in the statement of fact cannot possibly redound to the credit of the department nor help to advance its case. In the present case, when the petitioner had sworn upon personal knowledge that he was never asked by the Sales Tax Officer to appear before him the least that could be expected of the department was a positive assertion supported by a copy of the relevant record. If there was anything on the record to support the statement made in the counter-affidavit it would have been only fair on the part of the department to have annexed a copy thereof.
9. Again in this case where the stand taken by the department was that the process-server had gone to the business premises of the petitioner and his younger brother who was found present had refused to accept the notice under Section 21, whereupon the notice was affixed, one would expect that the counter-affidavit would be sworn to by the process-server or by the Assistant Sales Tax Officer. In the present case the counter-affidavit is by a Sales Tax Officer other than the one who made the assessments. The counter-affidavit being vague and evasive there is no alternative but to accept the petitioner's assertion that no notice was ever served upon him and also that he had no younger brother at all who could possibly have refused to receive the notice as alleged in the report of the process-server.
10. Again, it is somewhat strange and difficult to appreciate why the Assistant Sales Tax Officer, who had very properly taken the trouble of making a local enquiry on the 21st of March, 1963, and had, according to the assessment orders, found that the shop of the petitioner was lying locked and his enquiries had revealed that the petitioner was not running any business since a long time and he had actually contacted him at the premises where the petitioner was employed and yet he was prepared to swallow the report of the process-server hook, line and sinker, and took no steps to personally serve the petitioner before proceeding to make an ex parte assessment on 23rd March, 1963. Having once come to know the true position regarding the petitioner it became his duty to give an opportunity to the assessee, in the interest of justice, to show cause Why an ex parte assessment should not be made against him. There is, as already. observed, no mention in the assessment order that he told the petitioner, when he met on the 21st March, 1963, that he proposed to make an ex parte assessment order shortly against him.
11. That apart, it is necessary to observe that the particular mode which the process-server will follow for serving the notice cannot be left to his sweet will and pleasure and the discretion is one which has to be exercised by the Sales Tax Officer on the particular facts and circumstances of each case. Merely because the process-server finds that the assessee or his agent refuses to accept service, he cannot, ordinarily, there and then affix the notice, so as to constitute valid service within the meaning of Rule 77. This rule reads :-
Modes of service.-The service of any notice, summons or order under the Act or the rules may be effected in any of the following ways, namely-
(a) by giving or tendering a copy thereof to the dealer or licensee, or his manager or agent; or
(b) if such dealer or licensee or his manager or agent cannot easily be found, by leaving a copy thereof at his last known place of business or residence or by giving or tendering it to some adult male member of his family ; or
(c) if the address of such dealer or licensee is known to the Sales Tax Officer by sending a copy thereof to him by registered post ; or
(d) if none of the modes aforesaid is practicable, by affixation of a copy thereof in some conspicuous place at his last known place of business or residence.
12. It is significant that service by affixation of a copy of the notice at the last known place of business or residence is to be resorted to as the last mode of service and not as was done in the present case as the very first mode. There is no evidence or material on the record to show that any of the modes of service provided in Rule 77 (a), (b) and (c) were first resorted to before proceeding to affix a copy thereof at the last known place of business of the petitioner. Furthermore, there should be some material on the record to show that none of the other three modes of service were practicable or feasible before resort is had to service by affixation. Service of notices is a serious matter and cannot be dealt with light-heartedly as would appear to have been in the present ease. The process-server's report, which is not supported by any affidavit from him, at least none has been annexed to the petition, was to the effect that the brother of the petitioner had refused to accept service and therefore he had proceeded to affix a copy thereof at his last known place of business. This is something, which was wholly unwarranted and contrary to Rule 77. I am supported in the view that I have taken by a decision of Pathak, J., in Deep Chand Jain v. The Assistant Sales Tax Officer, Muzaffarnagar, Civil Miscellaneous Writ No. 3920 of 1963 decided on 2-12-1963. The address of the dealer admittedly was known to the Sales Tax Officer on the 21st of March, 1963, if not earlier, when he had traced him out and had satisfied himself that he was working as an employee with M/s. Khub Chand Sampat Ram and, therefore, the least that he could have done was to have issued a fresh notice at the address now known to him and if personal service could not be effected upon him then an attempt should have been made to serve the notice by registered post and if that mode also proved infructuous, then only the Sales Tax Officer would have been justified in directing the process-server to affix a copy at the last known business address of the petitioner. The alleged service of the notice was therefore invalid and not in accordance with law for the assessment year 1958-59.
13. The position for 1959-60 assessment year is not much better, and, if anything, is worse. After the Sales Tax Officer had come to know on the 21st of March, 1963, that the petitioner, the sole proprietor of his business, was in fact working somewhere else and the business premises had been lying locked for a long time and it was known that he was working for someone else the process-server's attempt to serve the notice at the petitioner's defunct business premises can be nothing but a farce and a traversty of justice. For the assessment year 1959-60, there was, therefore,, even less justification for accepting the process-server's report and treating the service which was made by affixation at the last known place of business, as sufficient and valid.
14. For the reasons given above the assessment orders under the U. P. Sales Tax and Central Sales Tax Acts dated 23rd of March, 1963, and the 28th of November, 1963, for the assessment years 1958-59 and 1959-60 respectively and the recovery proceedings taken pursuant to such invalid assessment orders are hereby directed to be quashed.
15. Accordingly, the petitions are allowed with costs.
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Title

C. Maharaj And Sons vs Sales Tax Officer Iv And Ors.

Court

High Court Of Judicature at Allahabad

JudgmentDate
17 August, 1964
Judges
  • S Manchanda