1959 (2) TMI 26 - HC - VAT and Sales Tax

Issues Involved:
1. Rejection of the appeal due to non-compliance with rule 30 of the Assam Sales Tax Rules.
2. Validity of rule 74 of the Assam Sales Tax Rules in light of the amendment to the Court-fees Act.
3. Competency of the Assistant Commissioner of Taxes to entertain the appeal.

Detailed Analysis:

1. Rejection of the Appeal for Non-compliance with Rule 30:
The first issue concerns whether the Assistant Commissioner of Taxes was right in rejecting the appeal for non-compliance with rule 30 of the Assam Sales Tax Rules. Rule 30 mandates that the memorandum of appeal must be accompanied by a certified copy of the order appealed against and the fee prescribed in rule 74. The petitioner did not pay the fee as required by rule 74, leading to non-compliance with rule 30. Consequently, under rule 32, the appeal was summarily rejected. The court upheld this rejection, stating that the non-payment of the prescribed fee constituted a valid ground for dismissal of the appeal.

2. Validity of Rule 74 in Light of the Amendment to the Court-fees Act:
The second issue addresses whether rule 74 of the Assam Sales Tax Rules is ultra vires in view of the amendment to the Court-fees Act. The petitioner argued that rule 74 was ultra vires on several grounds: it constituted an excessive delegation of legislative power, it imposed a tax rather than a fee, and it conflicted with the amended Court-fees Act which prescribed a fixed fee for appeals. The court referenced two prior decisions (Banwarilal v. State of Assam and Bharat Automobiles v. State of Assam) which held that rule 74 was intra vires and did not involve excessive delegation. The court reiterated that the Assam Sales Tax Act authorized the State Government to fix fees for appeals, and this delegation was ancillary to the main purposes of the Act. The court also examined the distinction between a tax and a fee, citing the Supreme Court's definition that fees must have a correlation to the services rendered. The court found no evidence to suggest that the fees under rule 74 were not used for the services rendered. Lastly, the court addressed the argument of implied repeal due to the amendment of the Court-fees Act, concluding that both the Court-fees Act and rule 74 could coexist as they fell under different legislative items. Thus, rule 74 was not ultra vires.

3. Competency of the Assistant Commissioner of Taxes to Entertain the Appeal:
The third issue concerns whether the Assistant Commissioner of Taxes was competent to entertain the appeal. The petitioner argued that the Assistant Commissioner could only assist the Commissioner and not exercise independent powers. However, section 30 of the Assam Sales Tax Act allows appeals to be made to the "prescribed authority," which, according to rule 26 of the Assam Sales Tax Rules, includes the Assistant Commissioner of Taxes. Therefore, the court concluded that the Assistant Commissioner was indeed competent to hear the appeal.

Conclusion:
The court answered the referred questions as follows:
- Question (i): Affirmative - The Assistant Commissioner of Taxes was right in rejecting the appeal for non-compliance with rule 30.
- Question (ii): Negative - Rule 74 is not ultra vires.
- Question (iii): Affirmative - The Assistant Commissioner of Taxes was competent to entertain the appeal.

Separate Judgment:
SARJOO PROSAD, C.J., while agreeing with the majority on most points, expressed reservations regarding the second question. He opined that the amendment to the Court-fees Act impliedly repealed rule 74 to the extent of conflict. However, since the Court-fees Act was subsequently amended to delete the conflicting provision, he concurred with the majority's answers for the purposes of this case.

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