2001 (7) TMI 1120 - SC - VAT and Sales Tax

Whether the sales tax authorities can raise demands on the assessee on the basis of reassessment orders when the original assessment orders for the same assessment years and for the same turnover have been held to be valid? Held that - Appeal allowed. The contention on behalf of the appellant, however, is that as a result of the review petition filed by the State being allowed by this Court the original assessment orders stand restored and revived finds force as a consequence of the revival and restoration of the original orders of assessment, the authorities cannot base their demand on the orders of reassessment. The reassessment orders may have been valid when made but on restoration and revival of the original orders of assessment, in the circumstances as aforesaid, the State can recover tax calculated on the basis only of the original orders of assessment and is precluded from raising any demand of tax based upon the reassessment orders. The respondents cannot now rely upon the orders of reassessment.

Summary

Issues:
Validity of reassessment orders based on quashed notification for purchase tax under the Haryana General Sales Tax Act, 1973.

Analysis:
The Supreme Court addressed the issue of whether sales tax authorities can raise demands on the assessee based on reassessment orders when original assessment orders for the same assessment years and turnover have been upheld as valid. The case involved assessment orders passed under the Haryana General Sales Tax Act, 1973, levying purchase tax on dispatches made by the appellant of manufactured goods to depots outside the State. The original assessment orders were challenged, leading to a series of legal proceedings and judgments. The High Court initially quashed the notification prescribing the purchase tax rate, leading to the setting aside of assessment orders. However, the High Court allowed reassessment orders to be passed, which were later challenged. The Supreme Court reviewed various judgments and legal positions, ultimately concluding that only one set of assessment orders could stand - either the original orders or the reassessment orders. Upon the restoration and revival of the original assessment orders, the State was precluded from relying on the reassessment orders to recover tax. The Court emphasized that the State could only recover tax based on the original assessment orders. The judgment also addressed the issue of refunding tax amounts collected by the State and the calculation of interest, leaving these matters to be determined by the assessing authority in accordance with the decision and applicable laws.

In conclusion, the Supreme Court allowed the appeals, setting aside the judgments of the High Court and quashing the reassessment orders. The parties were directed to bear their own costs in the case.