9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
1988 (5) TMI 327 - SC - VAT and Sales TaxWhether rule 25-A(5) of the U.P. Sales Tax Rules, 1948 in so far as it stipulates that a recognition certificate issued for purposes of section 4-B of the U.P. Sales Tax Act, 1948 shall take effect from the date of its issue is inconsistent with, does not carry out the purposes of and, therefore, is ultra vires, section 4-B of the U.P. Sales Tax Act, 1948? Held that - Appeal dismissed. There is nothing unreasonable in this construction of section 4-B. Indeed by the 1978 Amendment, this position has been made clear in the rule itself which, after the amendment, expressly provides that the certificate will take effect from the date of the application made by the dealer and not merely from the date of the issue.
Issues: Interpretation of rule 25-A(5) of the U.P. Sales Tax Rules, 1948 in relation to section 4-B of the U.P. Sales Tax Act, 1948.
Analysis: The judgment delivered by the Supreme Court of India pertains to an appeal by the State of U.P. against the judgment of the Allahabad High Court regarding the validity of rule 25-A(5) of the U.P. Sales Tax Rules, 1948 in connection with section 4-B of the U.P. Sales Tax Act, 1948. The main issue revolved around whether the rule stating that a recognition certificate "shall take effect from the date of its issue" was inconsistent with the Act. The High Court, by majority opinion, held in favor of the respondent, challenging the clause's validity. The respondent argued that the rule did not align with the objectives of section 4-B and was ultra vires the Act. The controversy arose from the respondent's application for a recognition certificate under section 4-B(2) to avail concessional rates of purchase tax. The certificate was granted after a delay, leading to a dispute over the effective date of the certificate and the entitlement to reduced tax rates for purchases made prior to its issuance. The High Court reasoned that the certificate's efficacy during assessment for tax liability was crucial, suggesting that the certificate's availability at the time of assessment sufficed, even if obtained after the purchases. The High Court found the rule's provision that the certificate takes effect only from the date of its issue to be incongruent with the Act's purpose. The Supreme Court upheld the High Court's interpretation, emphasizing that the statute did not mandate contemporaneous possession of the certificate with purchases. The Court deemed the High Court's construction plausible, stating that the statutory language did not necessitate holding the certificate at the time of purchases. The Court highlighted that the words "in respect thereof" in the Act were broad enough to encompass a certificate obtained later but relevant to the turnover in question. The Court noted that the 1978 Amendment clarified this position by specifying that the certificate's effect would date back to the application, not just the issuance date. In conclusion, the Supreme Court dismissed the appeal, affirming the High Court's judgment. The Court found the interpretation of the Act by the High Court reasonable and in line with the legislative intent. The judgment highlighted the importance of statutory construction and the flexibility in interpreting legal provisions to align with the legislative purpose.
|
