1968 (9) TMI 94 - SC - VAT and Sales Tax

Whether the provisions of the Assam Sales Tax Act 1947 were validly extended to the Shillong Administered Areas? Whether the Dominion of India was entitled to exercise extra-provincial jurisdiction over the Shillong Administered Areas on April 15 1948 which was the material date? Held that - Appeal dismissed.The appeals against the assessments were also filed after the amendment. It is therefore not correct to say that the amending Act has been given a retrospective effect and the Assistant Commissioner of Taxes was therefore right in asking the appellant to comply with the provisions of the amended section 30 of the Act before dealing with the appeals. The expression otherwise directed only means that the appellate authority can ask the assessee to deposit a portion of the amount and not the whole but the section gives no power to the appellate authority to permit the assessee to furnish security in lieu of cash amount of tax.

Issues Involved:
1. Validity of the extension of the Assam Sales Tax Act, 1947 to the Shillong Administered Areas.
2. Applicability of the amended Section 30 of the Assam Sales Tax Act, 1947.
3. Authority to accept security in lieu of cash payment under the Assam Sales Tax Act, 1947.

Detailed Analysis:

1. Validity of the Extension of the Assam Sales Tax Act, 1947 to the Shillong Administered Areas:
The primary issue was whether the provisions of the Assam Sales Tax Act, 1947 were validly extended to the Shillong Administered Areas. The appellant argued that the Extra-Provincial Jurisdiction Act, 1947 was not applicable to the Shillong Administered Areas on April 15, 1948, as the instrument of accession was accepted on August 17, 1948. The respondents contended that the British Government exercised jurisdiction over these areas through the Indian (Foreign Jurisdiction) Order-in-Council, and this jurisdiction continued with the consent of the Siem of Mylliem after the British withdrawal. The Supreme Court sought clarification from the Central Government, which confirmed that the Dominion of India exercised extra-provincial jurisdiction over the Shillong Administered Area on April 15, 1948. The Court held that the notification extending the Act was valid, as the jurisdiction exercised by the British Government was extensive and continued with the consent of the Siem of Mylliem.

2. Applicability of the Amended Section 30 of the Assam Sales Tax Act, 1947:
The appellant contended that the amendment to Section 30, which required the payment of assessed tax before an appeal could be heard, should not apply retrospectively to assessment periods ending before the amendment came into force on April 1, 1958. The Court rejected this argument, stating that the assessments for the disputed periods were completed after the amendment came into force and the appeals were also filed post-amendment. Thus, the amended Section 30 applied, and the Assistant Commissioner was correct in requiring the payment of assessed tax before hearing the appeals.

3. Authority to Accept Security in Lieu of Cash Payment:
The appellant argued that the phrase "otherwise directed" in the amended Section 30 allowed the appellate authority to accept security instead of cash payment. The Court disagreed, interpreting "otherwise directed" to mean that the appellate authority could reduce the amount of tax to be deposited but could not accept security in lieu of cash. The Court held that there was no provision under the Act allowing the acceptance of security instead of cash payment of tax.

Conclusion:
The Supreme Court upheld the High Court's dismissal of the writ petitions, affirming the validity of the extension of the Assam Sales Tax Act to the Shillong Administered Areas, the applicability of the amended Section 30 to the assessments in question, and the interpretation that security could not be accepted in lieu of cash payment under the Act. The appeals were dismissed with costs.

← Previous Next →