1953 (9) TMI 12 - HC - VAT and Sales Tax

Summary

Issues:
1. Application under Articles 226 and 227 for a writ of prohibition against Sales Tax Officer.
2. Interpretation of Section 7(1) of the U.P. Sales Tax Act regarding submission of returns.
3. Contention of the applicant regarding the timing of making an election for basis of return.
4. Validity of rule 39, sub-rule (2) regarding variation of the basis of assessment.
5. Jurisdiction of the assessing authority under Section 7(3) to determine turnover for previous year.

Analysis:

The applicant, a joint stock company, sought a writ of prohibition against the Sales Tax Officer to halt future assessment proceedings for the year 1953-54 except on the basis of its turnover of the assessment year. The company's contention was that it had the right to choose the basis of its return submission, either the previous year or the assessment year, as per Section 7(1) of the U.P. Sales Tax Act. However, the court found that the choice had to be made at the initial submission, as implied by the provisions allowing an alternative basis. The applicant's argument that the election was not required initially was not accepted by the court, which emphasized the need for the dealer to make a choice at the first instance of submission.

Regarding the validity of rule 39, sub-rule (2), the applicant claimed that it was ultra vires of the State Government, allowing for a second election later. The court held that even if sub-rule (2) was invalid, the applicant would lose the right to submit returns based on the assessment year if sub-rule (1) was also deemed invalid. The court reasoned that the rule-making power of the Government extended to such provisions, and the applicant could not be considered aggrieved by assessments based on the previous year if the rules were valid.

Furthermore, the court examined the jurisdiction of the assessing authority under Section 7(3) to determine turnover for the previous year. It was established that the assessing authority had the power to assess based on his judgment in specific circumstances, such as when no return was submitted within the prescribed period or if the submitted return was deemed incorrect or incomplete. The court clarified that the authority's jurisdiction was not dependent on certain conditions precedent but on his determination of whether a proper return had been submitted.

In conclusion, the court rejected the applicant's plea for writs of prohibition, certiorari, and mandamus, stating that no prima facie case was made out for the issuance of the requested writs. The application was consequently rejected based on the detailed analysis of the issues raised by the applicant.