Case: Bharat Steel Tubes Limited and Another Vs. State of Haryana and Another

indicated that a further notice has to be given. The question that fell for determination before the Court did not require examination as to whether such a notice was necessary. In view of the position as has emerged in the matter before us, we also do not think it necessary to finally indicate as to whether such a notice has to be issued and failure to issue such a notice would prevent the assessing officer from making a best judgment assessment. Though we are of the opinion that such a notice is not a statutory prescription, we do not intend to say anything more about it as judicial propriety would require a larger bench of the Court to examine the correctness of the view in the Indian Aluminium case. On an appropriate occasion, we hope the question as to whether such a notice is a condition precedent to completion of assessment would be examined.In Indian Aluminium case (supra) this Court has approved the earlier decision in Gurbax Singh v. Union of India, [1976] 3 SCR 247. The ratio in Gurbax Singhs case is that in the absence of a period provided by statute for completion of assessment, an order of assessment made with some delay would not be without jurisdiction. Even in Indian Aluminium case (supra), where the statute requires assessment to be completed within a reasonable time, the Court indicated that the argument of the learned counsel that the assessment had to be completed within a reasonable time in order to be sustainable was not acceptable as a sound one. 7. The short question that really falls for examination in this case is whether an order of assessment under sub- section (3) o f section 11 of the Punjab Act or section 28(3) of the Haryana Act can now be completed or would that be barred by limitation. Undoubtedly, the assessment proceedings have been very delayed. As the material placed before us shows, the assessee had gone before different courts from time to time to ask for injunction against the completion of assessment but that trial appears be have started in December, 1980 when a suit was filed and injunction was obtained. Though not ices were issued under sections 11(2) of the Punjab Act or 28(2) of the Haryana Act within a reasonable period from the filing of returns for the respective quarters in the assessment years under consideration, further action has not been tak en by the assessing officer to complete the assessments. But as we have said above, in the absence of any prescribed period of limitation, the assessment has to be completed within a reasonable period. What such reasonable period would be, would depend upon facts of each case. One view can be that it should be a period not exceeding five years as the Legislature has fixed the limitation of five years for completing assessments in case of escaped turnover. Unless then be an assessment made soon after the period to which such assessment relates, the question of consideration of escapement would indeed become difficult to consider and examine. We, are, however, not inclined to extend into a situation like the one before us, a period of limitation for completion of assessments under sections 11(3) or 28(3) of the respective Acts. The assessee has made returns for all the quarters and must have paid its admitted tax. Now that the assessing authority intends t o complete assessments under section 11(3) of the Act, we see no prejudice to the assessee if the assessing authority is permitted to complete the assessment now. On the other hand, if no assessment is made an anomalous situation might arise and eve n though the assessee has collected the sales tax on its sale turnover, it might raise a claim for refund of it in the absence of an assessment. We do not propose to create such a situation. It would suffice to say that in the situation which has a risen it the matter before us, it would be appropriate to call upon the assessing authority to complete all these pending assessments within a total period of four months from today on the basis of available material in the record before him and such other material as the authority may obtain. We, however, make it clear that such assessment has to be only under section 11(3) of the Act.Before we part with the case, we would like to indicate that assessment of tax should be completed with expedition. It involves the revenue to the state. In the case of a registered dealer who collects sales-tax on behalf of the State, there is no justification for him to withhold the payment of the tax so collected. If a timely assessment is completed, the dues of the State can be conveniently ascertained and collected. Delay in completion of assessment often creates problems. The assessee would be required to keep up all the evidence in support of his transactions. Where evidence is necessary, with the lapse of time, there is scope for its being lost. Oral evidence as and when required to be produced by the assessing authority may not be available if a long period intervenes between the transactions an d the consideration of the matter by the assessing authority. Long delay thus is not in the interest of either the assessee or the State. In view of the fact that a period of limitation has been prescribed for bringing the escaped turn-over into the net of taxation, such an eventuality cannot be grappled with appropriately unless timely assessment is completed. In several taxing statutes, even in a situation like this, where assessment under sections 11(3) or 28(3) of the respective Acts is contemplated, a period of limitation is provided. Until by statute, such a limitation is provided, it is proper for the State Governments to require, by statutory rules or appropriate instructions, to ensure completion of assessments with expedition and reasonable haste but subject to rules of natural justice. 8.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]Undoubtedly, the assessment proceedings have been very delayed. As the material placed before us shows, the assessee had gone before different courts from time to time to ask for injunction against the completion of assessment but that trial appears be have started in December, 1980 when a suit was filed and injunction was obtained. Though not ices were issued under sections 11(2) of the Punjab Act or 28(2) of the Haryana Act within a reasonable period from the filing of returns for the respective quarters in the assessment years under consideration, further action has not been tak en by the assessing officer to complete the assessments. But as we have said above, in the absence of any prescribed period of limitation, the assessment has to be completed within a reasonable period. What such reasonable period would be, would depend upon facts of each case. One view can be that it should be a period not exceeding five years as the Legislature has fixed the limitation of five years for completing assessments in case of escaped turnover. Unless then be an assessment made soon after the period to which such assessment relates, the question of consideration of escapement would indeed become difficult to consider and examine. We, are, however, not inclined to extend into a situation like the one before us, a period of limitation for completion of assessments under sections 11(3) or 28(3) of the respective Acts. The assessee has made returns for all the quarters and must have paid its admitted tax. Now that the assessing authority intends t o complete assessments under section 11(3) of the Act, we see no prejudice to the assessee if the assessing authority is permitted to complete the assessment now. On the other hand, if no assessment is made an anomalous situation might arise and eve n though the assessee has collected the sales tax on its sale turnover, it might raise a claim for refund of it in the absence of an assessment. We do not propose to create such a situation. It would suffice to say that in the situation which has a risen it the matter before us, it would be appropriate to call upon the assessing authority to complete all these pending assessments within a total period of four months from today on the basis of available material in the record before him and such other material as the authority may obtain. We, however, make it clear that such assessment has to be only under section 11(3) of the Act.Before we part with the case, we would like to indicate that assessment of tax should be completed with expedition. It involves the revenue to the state. In the case of a registered dealer who collects sales-tax on behalf of the State, there is no justification for him to withhold the payment of the tax so collected. If a timely assessment is completed, the dues of the State can be conveniently ascertained and collected. Delay in completion of assessment often creates problems. The assessee would be required to keep up all the evidence in support of his transactions. Where evidence is necessary, with the lapse of time, there is scope for its being lost. Oral evidence as and when required to be produced by the assessing authority may not be available if a long period intervenes between the transactions an d the consideration of the matter by the assessing authority. Long delay thus is not in the interest of either the assessee or the State. In view of the fact that a period of limitation has been prescribed for bringing the escaped turn-over into the net of taxation, such an eventuality cannot be grappled with appropriately unless timely assessment is completed. In several taxing statutes, even in a situation like this, where assessment under sections 11(3) or 28(3) of the respective Acts is contemplated, a period of limitation is provided. Until by statute, such a limitation is provided, it is proper for the State Governments to require, by statutory rules or appropriate instructions, to ensure completion of assessments with expedition and reasonable haste but subject to rules of natural justice.