1957 (5) TMI 35 - HC - VAT and Sales Tax

Summary

Issues:
1. Validity of assessment order under Bengal Finance (Sales Tax) Act, 1941.
2. Delay in granting registration certificate.
3. Jurisdiction of Sales Tax Authorities for assessment.
4. Application for review and remedy under Article 226 of the Constitution.
5. Interpretation of section 11(2) of the Act.
6. Procedural irregularities in assessment.

Analysis:

1. Validity of assessment order under Bengal Finance (Sales Tax) Act, 1941:
The petitioner challenged the assessment order dated 6th February, 1954, made under the Bengal Finance (Sales Tax) Act, 1941. The petitioner argued that the notice and assessment under section 11(2) of the Act were illegal and without jurisdiction. The Court examined the timeline of application for registration and the subsequent actions of the Sales Tax Authorities. It concluded that the Sales Tax Authorities were justified in issuing the notice and making the assessment under section 11(2) of the Act, as the petitioner had not failed to get itself registered within the meaning of the Act.

2. Delay in granting registration certificate:
The petitioner alleged a delay in granting the registration certificate, leading to the assessment order. The Court analyzed the application process and noted that the Sales Tax Authorities required reasonable time to verify the particulars in the application for registration. It observed that the delay in issuing the certificate was not unreasonable, considering the necessary enquiries and verification process involved.

3. Jurisdiction of Sales Tax Authorities for assessment:
The Court clarified that the Sales Tax Authorities had jurisdiction to assess the petitioner once the turnover exceeded the taxable quantum under section 4(2) of the Act. It distinguished between assessment of taxes due from registered dealers under section 11(1) and the procedure for unregistered dealers under section 11(2). The Court held that the assessment under section 11(2) was valid in this case.

4. Application for review and remedy under Article 226 of the Constitution:
The petitioner did not appeal under section 20 of the Sales Tax Act but filed an application for review, which was rejected. The Court noted that the petitioner's conduct did not disentitle them to relief under Article 226 of the Constitution. The Court emphasized that the petitioner's gross turnover had exceeded the taxable quantum, making them liable to pay tax, and thus, the discretionary relief under Article 226 was not barred.

5. Interpretation of section 11(2) of the Act:
The Court interpreted section 11(2) of the Act in the context of the petitioner's case. It discussed the meaning of "failed to get itself registered" and concluded that the petitioner's actions did not amount to a failure to register. The Court emphasized that the Sales Tax Authorities were justified in issuing the notice and making the assessment under section 11(2).

6. Procedural irregularities in assessment:
The Court acknowledged procedural irregularities in the assessment process but clarified that such irregularities did not amount to a lack of jurisdiction. It noted that the authorities had the jurisdiction to assess the petitioner once the taxable turnover threshold was crossed, and any irregularity was deemed as a procedural issue rather than a jurisdictional flaw.

In conclusion, the Court dismissed the petition, ruling that the petitioner's case fell under section 11(2) of the Act, and there was no justification for interference under Article 226 of the Constitution. The Court discharged the rule with no order as to costs.