V. Sivaraman Nair, J.
1. Petitioner is an assessee under the first respondent, Commercial Tax Officer. In respect of the assessment for the assessment year 1987-88, the first respondent passed an order on May 10, 1991 determining the tax payable by the petitioner Rs. 27,64,413.16. Since the petitioner had paid excess amount towards tax, he issued form “C” refund order for Rs. 6,09,778.53. It was also stated that amount would be adjusted towards tax for the year 1991-92. The assessment for the year 1991-92 was completed on October 12, 1993 without adjusting the refund resulting in demand of Rs. 2.40 lakhs. Petitioner has disputed the said amount and filed an appeal. He also wrote a letter requesting the first respondent that the demand for 1991-92 was wrong since an amount of Rs. 6,09,778.53 was due to him according to form “C” refund order.
2. Apparently after receiving the above letter, the first respondent issued a notice dated December 28, 1993 requiring the petitioner to produce books of account for the year 1987-88 under the Andhra Pradesh General Sales Tax Act, xerox copies of the final assessment order and form “C” refund order along with the payment details of the assessment year 1987-88 within three days from the date of receipt of the said notice. Petitioner states that he received that notice only on January 2, 1994. He was preparing to comply with the requirements of the notice but in the meantime, the first respondent passed an order which was signed on January 4, 1994 rectifying seemingly, arithmetical mistakes in the order in so far as refund amount due to the petitioner was concerned, as a consequence of which, the refund amount was reduced from Rs. 6,09,778.53 to an amount of Rs. 17,695. Even in respect of that amount, petitioner was informed that the amount was forfeited under sections 30-B and 30-C of the Andhra Pradesh General Sales Tax Act, 1957.
3. Counsel for the petitioner rests his case entirely on the provisions of rule 50 of the Andhra Pradesh General Sales Tax Rules which enables rectification of orders by the assessing or appellate or revising authority. He also relied on the requirements of the provisions of sections 30-B and 30-C of the Andhra Pradesh General Sales Tax Act in support of his submission and urged that the order is unsustainable.
4. We examined the above contentions and heard the Government Pleader for Commercial Taxes who has taken notice. Proviso to rule 50 of the Andhra Pradesh General Sales Tax Rules is to the effect that,
“no such rectification which has the effect of enhancing an assessment or any penalty or fee shall be made unless the assessing, appellate or revising authority has given notice to the dealer of his intention to do so and has allowed him a reasonable opportunity of being heard.”
5. We understand the effect of the impugned order to enhance the assessment so as to wipe away more than Rs. 6,00,000 which was paid as excess tax. We are of the opinion that counsel for the petitioner is right in insisting that he ought to have been issued a notice proposing rectification in terms of rule 50 and the first respondent ought to have allowed him a reasonable opportunity of being heard in support of submissions which he would have made in reply to the show cause notice. We do not understand the notice dated December 28, 1993, to be a show cause notice which complies with the requirements of the proviso to rule 50 of the Andhra Pradesh General Sales Tax Rules. That notice did not contain any proposal to rectify the assessment order enhancing the tax due, resulting in reduction of that amount which was ordered to be refunded to the petitioner.
6. The position under section 30-C does not seem to be any different. Forfeiture of the amount is provided for only in certain contingencies, viz., if it is found that a dealer liable to pay tax, collects any sum by way of tax in excess of the tax payable by him or otherwise collects tax in contravention of the provisions of section 30-B. Exercise of power under section 30-C requires advertence to these jurisdictional facts and findings thereon. The impugned order does not contain any such findings. Reading section 30-C as a whole, we are of the opinion that the assessing officer can act thereunder to forfeit any amount of tax collected in excess of the tax payable by him or any amount collected towards tax in contravention of any provision of law only after the same is quantified after due investigation into the facts and the circumstances of the case. Admittedly, no such investigation or enquiry has taken place in this case. The forfeiture order dated January 4, 1994 by the first respondent cannot, therefore, be enforced either for rectification under rule 50 of the Rules or as an order authorising forfeiture under section 30-C of the Andhra Pradesh General Sales Tax Act, 1957.
7. After hearing both sides, we are of the opinion that to avoid any further delay in the matter the order dated January 4, 1994 may be treated as notice requiring the petitioner to show cause against a proposal to rectify the mistake in the assessment order for the year 1987-88 so as to reduce the amount of refund due to the petitioner by enhancing the assessment as also for the purpose of ordering forfeiture of excess amount which is alleged to have been collected towards tax or amount collected towards tax in contravention of the provisions of the Act. Treating the above order as a notice for these twin purposes, the petitioner shall submit his explanation within a period not exceeding two weeks from today. The first respondent may pass appropriate orders strictly in compliance of the statute. He shall do so as expeditiously as possible.
8. The writ petition is disposed of with the above directions.
9. Petition disposed of accordingly.