1987 (4) TMI 446 - SC - VAT and Sales Tax

Whether weights and measures were included in mill-stores and hardware ? Held that - In the special facts and circumstances of this case the assessee should not be made to pay the amount involved in the three years in question. We indicate that this shall not be cited as a precedent. If the amount has in the meantime been collected the same be refunded to the assessee.

Summary

Issues:
- Assessment of sales tax under the Uttar Pradesh Sales Tax Act for the periods 1967-68, 1968-69, and 1969-70.
- Interpretation of a notification by the State Government regarding single point tax on "mill-stores and hardware."
- Consideration of whether weights and measures are included in the notification.
- Application of the principle of estoppel against the statute.
- Determination of tax liability for a small dealer based on representations made by authorities.
- Decision on whether the tax demand should be collected based on special circumstances.

Analysis:

The judgment by the Supreme Court pertains to three appeals concerning the assessment of sales tax under the Uttar Pradesh Sales Tax Act for the years 1967-68, 1968-69, and 1969-70. The appellant, a dealer in weights and measures, was affected by a notification issued by the State Government under section 3-A of the Act, imposing single point tax on the sale of "mill-stores and hardware" at a higher rate. The issue arose regarding whether weights and measures fell within the ambit of this notification. The High Court's Full Bench decision in a related case concluded that weights and measures were not covered by the notification, contrary to the appellant's position.

The appellant had initially received a favorable assessment from the assessing officer based on the notification under section 3-A. However, the appellate authority later ruled against the appellant, stating that the sales were not covered by the notification and were liable for tax at the general rate. The Supreme Court, after considering the arguments, upheld the Full Bench decision of the High Court, affirming that weights and measures were not included in the notification. The Court also clarified that representations made by the State Government or authorities could not create an estoppel against the statute, emphasizing that estoppel cannot be invoked against an Act.

The appellant's counsel argued that the appellant, being a small dealer, was misled by the authorities' orders and did not have the opportunity to verify the correctness of the representations. The appellant contended that the tax liability, amounting to less than Rs. 30,000 over the three years, should not be enforced due to the special circumstances. The Court, considering the specific facts of the case, referenced previous decisions where tax demands were waived under similar conditions. Consequently, the Court decided that the appellant should not be required to pay the tax amount for the three years in question, emphasizing that this decision should not serve as a precedent. If the tax had already been collected, the Court ordered a refund to the appellant, with each party bearing their respective costs before the High Court and the Supreme Court.