COMMISSIONER OF SALES TAX AND ORS. versus M/S SUBHASH & CO.

Citation: [2003] 2 S.C.R. 44 · Decided: 17-02-2003 · Supreme Court of India · Bench: SHIVARAJ V. PATIL · Disposal: Appeal(s) allowed

Judgment (excerpt)

A 
COMMISSIONER OF SALES TAX AND ORS. 
v. 
MIS SUBHASH & CO. 
FEBRUARY 17, 2003 
B 
[SHIVARAJ V. PATIL AND ARIJJT PASAYAT, JJ.) 
Sales Tax: 
MP. Sales Tax Act, 1958-Section 19(/)-MP. General Sales Tax Rules, 
C 1959-Rule 63-Re-assessment-Procedure for service of notice-Reassessment 
proceedings challenged as violative of principles of natural justice due to 
improper service of notice-De nova reassessment directed by Single Judge 
of High Court-Division Bench held de nova assessment without reserving 
any right for the assessee to raise plea of limitation to be improper-On 
D appeal-Held, whenever an order is struck down as violative of principles of 
natural justice, there is no final decision of the case and the proceedings are 
left open-Hence, de nova assessment is justified-Non-issue of notice or 
mistake in the issue of notice or defective service of notice does not affect the 
jurisdiction of the assessing officer-Proceedings would be vitiated if prejudice 
is caused by non-issue or invalid service, but not by its irregular service-
E Validity of service of notice is a question of fact which depends on the facts 
and circumstances of the case-However, if the service of notice is treated as 
non-est, de nova assessment is not permissible without considering the question 
of limitation. 
F 
Words and Phrases: 
'Notice '-Meaning of in the context of Rule 63 of General Sales Tax 
Rules, 1959. 
Respondent-assessee was registered as a dealer under M.P. General 
G Sales Tax Act, 1958. The assessments were originally completed for the 
assessment years 1981-82, 1982-83 and 1983-84. Respondent applied for 
cancellation of the registration on 14.12.1987 and the same was cancelled 
w.e.f. 23.10.1987. Assessing Officer initiated proceedings for re-assessment 
u/s 19(1) of M.P. General Sales Tax Act, 1958 for the above mentioned 
assessment years on the ground that there was short levy of tax and 
H 
44 
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COMMISSIONER OF SALES TAX v. MIS. SUBHASH & CO. 
45 
escapement of assessment. Notices were issued for re-assessment in respect A 
of the three assessment years on the address as indicated in the certificate 
of registration. Since it was learnt that the respondent was not residing 
at the address, service by affixture was resorted to. Thereafter 
reassessment was done. Respondent challenged the re-assessment order 
before revisional authority on the ground that the orders of re-assessment B 
as well as original assessment were not served on him, rendering the re-
assessment proceedings illegal. The revisio11 petition was dismissed 
observing that the respondent's registration certificate remained in force 
till he applied for cancellation i.e. 14.12.1987, and as the notices were issued 
for service at the address given in the registration certificate, there was 
nothing illegal. 
C 
Respondent filed writ petition on the ground that the procedure 
prescribed for service of notice as contemplated under Rule 63 of M.P. 
General Sales Tax Rules, 1959 had not been followed and hence principles 
of natural justice were violated. Single Judge of High Court allowed the 
writ petition holding that service was not effected properly inasmuch as D 
the Assessing officer had failed to record the reasons for his satisfaction 
that the assessee was evading service or that the service was not possible 
in any other manner before resorting to service by affixture. Hence it was 
directed that the re-assessment were to be done do nova. On appeal 
Division Bench held that the direction for de nova assessment without E 
reserving any right for the respondent-assessee to raise the plea of 
limitation was not proper. Hence the present appeal. 
Allowing the appeal, the Court 
HELD: 1. Single Judge was justified in directing de nova assessment F 
by an order of remand. The direction was appropriate as the only ground 
on which the interference was made related to the violation of principles 
of natural justice by alleged improper service of notice. [49-G; HJ 
Commissioner of Sales Tax, U.P. v. R.P. Dixit Saghidar, (2001) 9 SCC 
324, referred to. 
G 
2. Whenever an order is struck down as invalid being violative of 
principles of natural justice, there is no final decision of the case and, 
therefore, proceedings are left open. All that is done is that the order 
assailed by virtue of its inherent defect is vacated but the proceedings are 
not terminated. (54-F) 
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46 
SUPREME COURT REPORTS 
[2003] 2 S.C.R. 
A 
Quduthur Bros. v. Income Tax

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