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2000 DIGILAW 1058 (RAJ)

Chetak Cinema v. State of Rajasthan

2000-08-21

RAJESH BALIA, S.K.GARG

body2000
JUDGMENT 1. - Heard learned counsel for the parties in all these cases. The petitioner has been assessed to entertainment tax under the provisions of Rajasthan Entertainment Tax Act, 1987 by way of re-assessment for the months of April, 1991 to Sep., 1991. The assessment orders were made separately for each month and hence six separate writ petitions have been filed. The Assessing Authority has found the assessee to be indulging in the activities of tax evasion by keeping duplicate ticket books and utilising duplicate tickets of different shows on the basis of survey conducted on 22nd Oct., 1991. On that material subsequent assessments have also been framed by estimating the tax liability on the basis of his best judgment on the conduct of the assessee that the assessee has indulged in activities of tax evasion by using duplicate sets of ticket books and by utilising duplicate tickets. Consequently, for each months, tax has been assessed and levied and consequent to that. for delayed payment of tax, interest has also been levied and penalty for concealment has also been levied. 2. The assessee instead of availing alternative remedy of appeal, has thought it fit to challenge directly the assessment order before this Hon'ble Court by raising question about constitutional validity of provisions providing for payment of interest as well as on the ground that re-assessment proceedings for assessment period April, 1991 to Sep., 1991 were undertaken vide notice dated 15.3.99 without opportunity of hearing in the manner. 3. So far as constitutional validity regarding payment of interest is concerned, the assessee has challenged it because no interest has been provided on refund of the tax if it becomes due to the assessee. Charging of interest on delayed payment of tax is also ultra vires the provisions of Article 14 of the Constitution of India being discriminatory in nature. For this purpose he has relied on decision of Hon'ble Supreme Court in the case of Khazan Chand v. Smt. Vidyawanti Devi Jain, reported in AIR 1984 SC 762 . It was a case arising under the Jammu and Kashmir General Sales Tax Act. For this purpose he has relied on decision of Hon'ble Supreme Court in the case of Khazan Chand v. Smt. Vidyawanti Devi Jain, reported in AIR 1984 SC 762 . It was a case arising under the Jammu and Kashmir General Sales Tax Act. Challenge to the provision of Jammu and Kashmir Sales Tax Act has been made on the ground that it provides payment of interest at the rate different that what is prevailing in other States of Union of India and also that the rate of interest provided for delayed payment of tax is unreasonably high. The court found that payment of interest in the case of default in payment of tax is means of compelling an assessee to pay tax due by the prescribed date. It is mode of recovery and well within the Legislative power of the State. Thus the court sustained provision for levy of interest on delayed payment of tax, as part of just mode of recovery of delayed tax and as a compensatory measure for keeping the public exchequer deprived of timely payment of tax. On the question of discrimination as was raised before the Court, the Court found that if provision of Legislation of every State on a particular topic are to be identical in every respect, there is no purpose in including that topic in the State List and it may as well be included in the Union List. Merely because the provisions of other State laws on the same subject are not identical, cannot make such provisions discriminatory. That is to say that Legislations of different Legislative Authorities are not comparable for the purpose of examining the question of discrimination. That obviously is not a question that has been raised before us. 4. Lastly, the question which was before the Supreme Court was about the rate of interest being excessive. The Court found the rate to be on little higher side, but still, found it not unreasonably excessive because the Act provides for similar rates to be levied on delayed payment of refund. The plea of excessive rate of interest is also not before us. The decision in Khajan Singh's case is therefore, no authority for contending that merely because no interest is payable on refund, interest levied on delayed payment of tax becomes discriminatory. 5. The plea of excessive rate of interest is also not before us. The decision in Khajan Singh's case is therefore, no authority for contending that merely because no interest is payable on refund, interest levied on delayed payment of tax becomes discriminatory. 5. Be that as it may, whether interest ought to be allowed on refund or not is a hypothetical question in the present case inasmuch as in none of the case any refund is due to the petitioner. The question whether this provision can be said to be a case of omissus causa or whether the petitioner is entitled to claim interest on refund is the matter which does not arise directly for consideration in these cases at this stage. The academic question cannot be decided for the purpose of examining constitutional validity of any provision. We, therefore, decline to go into the constitutional validity of the provision as raised in these writ petitions at this stage. 6. So far as inherent lack of jurisdiction on the part of assessing authority to reassess the tax after expiry of period prescribed for such reassessment is concerned, that according to the assessing authority has escaped assessment to tax the attention of the Court in invited to Section 5-C of the Act of 1957 which reads as under : "5-C Re-assessment of tax:- If in consequences of definite information which has come into his possession, the prescribed authority discovers that any payment for admission to an entertainment or exhibition of an advertisement has escaped assessment to tax under any provision of this Act such authority may, at any time within a period of three years following the close of the financial year to which it pertains and where it pertains to a period preceding the commencement of the Rajasthan Entertainments and Advertisements Tax (Amendment) Act, 1970, within a period of three years from the date of such commencement, send a notice to the proprietor in the prescribed form and after healing him and making such enquiry as it considers necessary may proceed to reassess and recover the tax payable by him." 7. Section 5-C is unequivocal in term that while it confers jurisdiction on assessing authority to make reassessment of any period where as a consequence of definite information which has come into the possession of the assessing authority. Section 5-C is unequivocal in term that while it confers jurisdiction on assessing authority to make reassessment of any period where as a consequence of definite information which has come into the possession of the assessing authority. It discovers that any payment for admission to an entertainment or exhibition of an advertisement has escaped from tax under any provision of this Act, such authority may at any time. within a period of three years following the close of the financial year to which it pertain send a notice to the proprietor in the prescribed form and after hearing him and making such enquiry as it considers necessary may proceed to reassess and recover the tax payable by him. It prescribed limitation for sending notice, but it does not prescribe any limitation for completing the is assessment thereafter. There is no dispute before us that the notices have been issued initially on 12.9.94 relating to the calendar months April, 1991 to Sep., 1991, which is the part of financial year 1991-92 which closed on 31st March, 1992. The period for sending notices under Section 5-C would expire on 31.3.95. The notices issued in Sep., 1994, therefore, cannot be held to be barred by time. It has been stated by the learned counsel for the petitioner that though notices have been issued under Section 5-B, the assessment has been made under Section 5-C. Suffice it to say that mere wrong mention of provision under which notices have been issued would not render the issuance of notice an act of nullity if jurisdiction to issue such notice is otherwise shown to exist under law. Moreover, subsequent to first notices, subsequent notices were also issued under Section 5-C of the Act before 31.3.95. 8. In these circumstances, none of the contentions challenging the constitutional validity or inherent lack of jurisdiction to issue notice beyond limitation for challenging assessment order at this stage has been made out in the facts and circumstances of these cases. 9. Moreover, subsequent to first notices, subsequent notices were also issued under Section 5-C of the Act before 31.3.95. 8. In these circumstances, none of the contentions challenging the constitutional validity or inherent lack of jurisdiction to issue notice beyond limitation for challenging assessment order at this stage has been made out in the facts and circumstances of these cases. 9. Since the matter involves enquiry into facts after taking into consideration a detailed reply and objections submitted by the petitioner for reaching necessary findings which can appropriately be dealt with by appellate authority, the petitioner in such circumstances makes a prayer that in that event he may be left free to avail alternative remedy on the merits of the assessment order by an appropriate order about entertaining the appeals now. The prayer appears to be reasonable. Accordingly, these petitions are dismissed with liberty to the petitioner to avail remedy of appeal as prescribed under the Act within a period of six weeks from the date of this order. The appellate Authority shall entertain such appeal by making an order on condonation of delay if necessary if presented within six weeks of this order. 10. With the above observations, the present writ petitions are disposed of. There shall be no order as to costs.Writ Petition Dismissed. *******