1994 (7) TMI 276 - SC - VAT and Sales Tax

Whether General Manager or Chief Commercial Superintendent or Controller of Stores has to be ordinarily treated as an assessment order against the North Eastern Railway? Held that - Appeal allowed. The application for registration was validly filed by the Chief Commercial Superintendent on behalf of the North Eastern Railway. In the application it was specifically stated that the principal place of business was situated at Gorakhpur and, as such, the Sales Tax Officer at Gorakhpur had the jurisdiction to deal with the matter. We, therefore, hold that the Sales Tax Officer at Gorakhpur was fully justified in undertaking the assessment proceedings in respect of the North Eastern Railway under the Act It is unfortunate that the assessment under the Act in respect of the assessment year 1965-66 has not as yet been finalised. We remand the case before the Sales Tax Officer, Gorakhpur with a direction to hold the assessment proceedings afresh. He shall pass fresh assessment order after hearing the railway authorities.

Summary

Issues:
Jurisdiction of Sales Tax Officer in assessment proceedings for North Eastern Railway under the U.P. Sales Tax Act, 1948.

Comprehensive Analysis:
The case involved a dispute regarding the jurisdiction of the Sales Tax Officer in assessment proceedings for the North Eastern Railway under the U.P. Sales Tax Act, 1948. The North Eastern Railway sold various items at railway stations, and an application for registration under the Act was filed by the Chief Commercial Superintendent, declaring Gorakhpur as the principal place of business. However, the assessment proceedings were conducted based on a sales tax return filed by the Chief General Manager, leading to the imposition of sales tax. The revising authority remanded the matter to the Sales Tax Officer, stating that two assessment orders could not be made for the North Eastern Railway. Further revisions were filed, and the final revising authority concluded that the transactions occurred outside the Sales Tax Officer's jurisdiction, and the railway authorities were not liable to pay sales tax.

The Allahabad High Court dismissed the revision petition, reasoning that the Sales Tax Officer in Gorakhpur lacked jurisdiction to make the assessment as the General Manager had not declared Gorakhpur as the principal place of business. However, the Supreme Court disagreed with this interpretation, emphasizing that the assessment was against the North Eastern Railway as an entity, not a natural person. Rule 54(1)(e) allowed any authorized officer to file the registration application on behalf of the railway, and the application clearly stated Gorakhpur as the principal place of business, giving jurisdiction to the Sales Tax Officer in Gorakhpur.

The Supreme Court held that the application for registration was validly filed by the Chief Commercial Superintendent on behalf of the North Eastern Railway, granting jurisdiction to the Sales Tax Officer in Gorakhpur for the assessment proceedings. The Court set aside the High Court's judgment and the previous orders, remanding the case to the Sales Tax Officer in Gorakhpur to conduct fresh assessment proceedings. The railway authorities were given the opportunity to raise objections during the reassessment. The appeal was allowed, with no costs imposed, to resolve the jurisdictional issue and finalize the assessment for the relevant year.