1951 (11) TMI 13 - HC - VAT and Sales Tax

Issues Involved:
1. Whether the applicant is a "dealer" under the Orissa Sales Tax Act, 1947.
2. Whether the proceedings before the Sales Tax Officer were void due to non-service of preliminary notices under Sections 12 and 13 of the Orissa Sales Tax Act, 1947.
3. Jurisdiction of the Certificate Officer and the Revenue Commissioner to examine the legality or correctness of the sales tax assessment.

Detailed Analysis:

Issue 1: Whether the applicant is a "dealer" under the Orissa Sales Tax Act, 1947.
The applicant contended that he was not a "dealer" in respect of the materials supplied by the Public Works Department (P.W.D.) for executing his contract and thus was not liable to pay sales tax on those materials. The court examined whether it could review the assessment made by the Sales Tax Officer in a petition against the order of the Revenue Commissioner. The court held that the Revenue Commissioner's powers, as well as those of the Certificate Officer, are circumscribed by the Public Demands Recovery Act and the Sales Tax Act. Section 22 of the Sales Tax Act bars the jurisdiction of any court to question an assessment made under the Act. The Certificate Officer, deemed a "Court" under Section 66 of the Public Demands Recovery Act, has no jurisdiction to consider the legality or correctness of the assessment. The court concluded that the applicant could not challenge the assessment's legality or correctness in this petition.

Issue 2: Whether the proceedings before the Sales Tax Officer were void due to non-service of preliminary notices under Sections 12 and 13 of the Orissa Sales Tax Act, 1947.
The applicant argued that the entire proceeding before the Sales Tax Officer was void because the preliminary notices for making the assessment under Section 12 and the subsequent notice of demand under Section 13 were not served on him. The court noted that the applicant admitted during evidence that he received a notice from the Sales Tax Department asking for details of the contracts executed by him. This admission indicated that the notices required by Sections 12 and 13 were properly served. Consequently, there was no material before the Certificate Officer to conclude that the assessments were not made "under the Sales Tax Act," and thus the bar imposed by Section 22 on the jurisdiction of the Certificate Officer remained intact.

Issue 3: Jurisdiction of the Certificate Officer and the Revenue Commissioner to examine the legality or correctness of the sales tax assessment.
The court addressed whether the Certificate Officer and the Revenue Commissioner had jurisdiction to investigate the applicant's status as a "dealer" and the nature of the transactions as "sales." Section 20 of the Sales Tax Act confers jurisdiction on the Sales Tax Officer to determine these preliminary questions. The finality given to the Sales Tax Officer's decision under Section 22 applies not only to the assessment but also to the preliminary questions. The court referenced the principles laid down by Lord Esher in The Queen v. The Commissioners for Special Purposes of the Income Tax, which were followed in Brij Raj Krishna v. Shaw and Bros., emphasizing that the Sales Tax Officer's jurisdiction includes determining preliminary facts. The court concluded that the Certificate Authorities acted properly in refusing to question the legality or correctness of the assessment and in disallowing the applicant's petition under Section 9 of the Public Demands Recovery Act.

Conclusion:
The court rejected the petition with costs, affirming that the Certificate Officer and the Revenue Commissioner had no jurisdiction to examine the legality or correctness of the sales tax assessment made by the Sales Tax Officer. The applicant's remedy lay within the provisions of the Sales Tax Act, which he did not avail himself of. The statutory bar under Section 22 of the Sales Tax Act precluded any court from questioning the assessment or the preliminary decisions made by the Sales Tax Officer. The petition was thus dismissed, with the court assessing the hearing fee at two gold mohurs.

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