1958 (8) TMI 41 - HC - VAT and Sales Tax

Summary

Issues:
1. Jurisdiction of Sales Tax Officer to reassess under section 21 of U.P. Sales Tax Act.
2. Adequacy of remedy provided by statute in case of appeal.
3. Comparison of present case with Himmatlal Harilal Mehta v. The State of Madhya Pradesh case.

Analysis:
1. The petitioner argued that the Sales Tax Officer did not have the authority to reassess under section 21 of the U.P. Sales Tax Act. The Sales Tax Officer previously accepted part of the turnover as concerning goods purchased in the State. However, in the impugned order, the Sales Tax Officer assessed the entire turnover as liable to sales tax, as he found that goods were purchased outside U.P. The Court held that the Sales Tax Officer had jurisdiction to make this finding and reassess the petitioner. The petitioner could appeal this decision to challenge its correctness before the appellate Court, indicating that the Sales Tax Officer and the Judge Appeals had full jurisdiction to decide the matter.

2. The petitioner contended that an appeal would not be an adequate remedy as the Judge Appeals lacked the authority to stay the recovery of sales tax. The Court disagreed, stating that the requirement to deposit the sales tax amount during the appeal did not render the remedy inadequate. The Court highlighted that sales tax deposits are generally collected from customers and the amount demanded was relatively small compared to the dealer's total turnover. Therefore, the Court found that the petitioner, being a substantial dealer, would not suffer significant harm by depositing the required amount during the appeal process.

3. The petitioner cited the Himmatlal Harilal Mehta case, arguing that the remedy provided by the Sales Tax Act was burdensome. However, the Court distinguished the facts of that case from the present case. In the Himmatlal Harilal Mehta case, the Supreme Court found certain provisions of the Sales Tax Act to be ultra vires, leading to an illegal imposition of sales tax. In contrast, in the present case, the petitioner's argument was based on the interpretation of section 21 of the Sales Tax Act regarding reassessment. The Court rejected the petitioner's reliance on the Himmatlal Harilal Mehta case, emphasizing that the situation in the present case did not involve any inconsistency with the Constitution or invalid legislation. The Court concluded that the petitioner's right to challenge the assessment order through appeal channels rendered the remedy provided by the statute adequate, and dismissed the petition under Article 226.