1976 (3) TMI 158 - SC - VAT and Sales Tax

Recovery proceedings in pursuance of the assessment orders and the demand was sought to be realised from the sons of the deceased proprietor by coercive measures - Held that - Appeal partly allowed. The judgments of the High Court are affirmed but the orders with regard to the recovery proceedings which are invalid are set aside.

Summary

Issues Involved:
1. Validity of assessment orders made against a deceased person.
2. Requirement of notice to legal representatives under Section 7-C(3) of the Uttar Pradesh Sales Tax Act.
3. Validity of recovery proceedings without a demand notice under Section 8 of the Act.

Detailed Analysis:

1. Validity of Assessment Orders Made Against a Deceased Person:
The appellant contended that the assessment orders were invalid as they were made against Rashidul Hasan after his death. The court examined Section 7-C of the Uttar Pradesh Sales Tax Act, which outlines the liability of the executor, administrator, or other legal representative to pay the tax assessed on the deceased person's estate. The court noted that the Sales Tax Officer had served a notice to the deceased while he was alive, requiring the production of documents and books of account. Since the notice was served before Rashidul Hasan's death, there was no requirement under the Act for a second notice to the legal representatives. The court concluded that the assessment orders were not invalid due to the lack of a fresh notice to the legal representatives.

2. Requirement of Notice to Legal Representatives Under Section 7-C(3):
The appellant argued that under Section 7-C(3), a notice should have been served on the legal representatives to produce accounts, documents, and other evidence for the determination of turnover and assessment of tax. The court clarified that Section 7-C(3) allows the Sales Tax Officer to require from the legal representatives any accounts or documents that could have been required from the deceased. However, since the deceased had already been served with a notice to produce documents during his lifetime, the legal representatives were not entitled to a fresh notice. The court emphasized that the legal representatives were aware of the proceedings and had taken several adjournments, thus they had ample opportunity to produce evidence. The court rejected the appellant's submission, stating that the orders of assessment were not invalid due to non-service of notice on the legal representatives.

3. Validity of Recovery Proceedings Without a Demand Notice Under Section 8:
The appellant contended that no recovery proceedings could be initiated without serving a demand notice on the legal representatives under Section 8 of the Act. The court examined Section 8, which mandates that the tax assessed must be paid within a specified time from the date of service of the notice of assessment, and in default, the amount becomes recoverable as arrears of land revenue. The court found that no demand notice had been served on the legal representatives, making the recovery proceedings invalid. The court referred to the case of Sahu Rajeshwar Nath v. Income-tax Officer, where it was held that a notice of demand is obligatory as a condition precedent to the institution of recovery proceedings. Consequently, the court quashed the recovery proceedings and the certificates issued under Section 8.

Conclusion:
The court affirmed the judgments of the High Court regarding the validity of the assessment orders but set aside the orders related to the recovery proceedings, declaring them invalid due to the lack of a demand notice to the legal representatives. The appeals were partly allowed, with no order as to costs. The court also noted that it expressed no opinion on the appeals pending before the Assistant Commissioner (Judicial), Sales Tax.