1959 (7) TMI 47 - HC - VAT and Sales Tax

Issues Involved:
1. Validity of the notices dated 20th July, 1955.
2. Jurisdiction of the Sales Tax Officer to issue the notices.
3. Effect of the transfer of cases to the Assistant Commissioner on 23rd December, 1955.
4. Validity of the notices dated 4th July, 1958.
5. Applicability of the Bombay Sales Tax Laws (Validating Provisions and Amendment) Act, 1959.

Issue-wise Detailed Analysis:

1. Validity of the notices dated 20th July, 1955:
The primary issue was whether the notices issued by the Sales Tax Officer on 20th July, 1955, under sub-section (2) of section 11 of the Central Provinces and Berar Sales Tax Act, 1947, were valid. The court held that these notices were valid as the Sales Tax Officer had jurisdiction to deal with the cases at the time of issuance. The petitioner had filed blank returns for the years 1952-53 and 1953-54, and the Sales Tax Officer was not satisfied with these returns, which justified the issuance of the notices. The court emphasized that the Sales Tax Officer had the authority to scrutinize the returns and initiate proceedings within three years of the expiry of the assessment periods.

2. Jurisdiction of the Sales Tax Officer to issue the notices:
The court examined whether the Sales Tax Officer had the jurisdiction to issue the notices on 20th July, 1955. It was established that the Sales Tax Officer was competent to receive the returns and issue notices under section 11(2) of the Act. The court noted that there was no material on record at the time of issuance indicating that the petitioner's gross turnover exceeded Rs. 20 lakhs, which would have necessitated the involvement of the Assistant Commissioner. Therefore, the Sales Tax Officer acted within his powers in issuing the notices.

3. Effect of the transfer of cases to the Assistant Commissioner on 23rd December, 1955:
The petitioner argued that the transfer of cases to the Assistant Commissioner on 23rd December, 1955, rendered the notices issued by the Sales Tax Officer on 20th July, 1955, invalid. The court rejected this contention, stating that the transfer did not invalidate the actions previously taken by the Sales Tax Officer. The court reasoned that the Sales Tax Officer had the inherent jurisdiction to scrutinize the returns and determine whether the cases fell within his jurisdiction. The transfer to the Assistant Commissioner was a procedural step that did not nullify the initial notices.

4. Validity of the notices dated 4th July, 1958:
The petitioner contended that the notices issued on 4th July, 1958, were invalid as they were issued after the expiry of the three-year period for making the assessment. The court found that these notices were not initiating the proceedings but were part of the ongoing process that started with the valid notices of 20th July, 1955. As the initial proceedings were validly initiated within the three-year period, the subsequent notices did not affect the legality of the ongoing proceedings.

5. Applicability of the Bombay Sales Tax Laws (Validating Provisions and Amendment) Act, 1959:
The respondents argued that even if the notices of 4th July, 1958, were considered invalid, the effect of the Full Bench decision in Bisesar House v. State of Bombay was taken away by section 6 of the Bombay Sales Tax Laws (Validating Provisions and Amendment) Act, 1959. However, the court did not find it necessary to delve into this argument, as it had already concluded that the notices of 20th July, 1955, were valid and the proceedings initiated on their basis were lawful.

Conclusion:
The court concluded that the notices dated 20th July, 1955, were valid and the proceedings initiated on their basis were lawfully started within the prescribed period. The transfer of cases to the Assistant Commissioner did not invalidate the initial notices or the proceedings. The subsequent notices of 4th July, 1958, did not affect the legality of the ongoing proceedings. Consequently, both petitions were dismissed with costs.

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