Case: Ganesh Prasad Dixit Vs. Commissioner Of Sales Tax, Madhya Pradesh

1. In respect of assessment to sales-tax for two accounting periods April 1, 1961 to June 30, 1961 and July 1, 1961 to September 30, 1961, the Board of Revenue, Madhya Pradesh, referred the following questions to the High Court of Madhya Pradesh forWhether in the facts and circumstances of the case the notice in Form XVI that was served on the applicant was invalid and therefore the assessment of the applicant on the basis of that notice was bad in law?(2) Whether in the facts and circumstances of the case the applicant was a dealer during the assessment period under the Act and the imposition of purchase tax on him under Section 7 of the Act was inThe appellants are a firm of building contractors and are registered as dealers under the Madhya Pradesh General Sales Tax Act 2 of 1959. The appellants purchased building materials in the two account periods and used the materials in the course of their business. The Sales Tax Officer, Jabalpur Circle, served notices under Section 18 (5) of the Act calling upon the appellants to show cause why "best judgment" assessments should not be made, and by order dated November 30, 1961, he assessed the appellants to tax in respect of goods purchased by the appellants for use in their construction business and imposed a penalty of Rs. 200 in each case. Appeals against the orders imposing tax and penalty were dismissed by the Assistant Commissioner of Sales Tax and the Board of Revenue.

Court's reasoning:
3. Rule 33 of the Madhya Pradesh General Sales Tax Rules, 1959, provides that a notice of assessment under Section 18 (5) shall be in Form XVI, and ordinarily it shall give not less than 15 days from the date of the service to the assessee to show cause why he should not be assessed or reassessed to tax and/or to pay penalty.The notices served upon the appellants did not give them a clear period of 15 days to show cause. But we are unable to hold on that account that the notices and the assessments were invalid. We agree with the High Court that the rule is not intended to be "either invariable or rigid", and unless prejudice has resulted to the tax-payer the proceedings are not liable to be set aside".It is not even suggested that because of the insufficiency of time the appellants were unable to submit their explanation for failure to make their returns ofBut the terms of Rule 33 of the Madhya Pradesh General Sales Tax Rules are plainly not mandatory. The answer given by the High Court on the first question must bedo not think that that is a reasonable interpretation of the expression "either consumes such goods in the manufacture of other goods for sale or other wise". It is intended by the Legislature that consumption of goods renders the price paid for their purchase taxable, if the goods are used in the manufacture of other goods for sale or if the goods are consumed otherwise.