1960 (8) TMI 72 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Validity of the Board of Revenue's exercise of revisional jurisdiction under Section 20 of the Andhra Pradesh General Sales Tax Act, 1957.
2. The impact of the Sales Tax Laws Validation Act, 1956, and subsequent judicial decisions on the assessments.
3. Adequacy of the opportunity given to the appellants to file objections.

Detailed Analysis:

1. Validity of the Board of Revenue's Exercise of Revisional Jurisdiction

The appellants contended that the Board of Revenue could not exercise revisional jurisdiction under Section 20 of the Andhra Pradesh General Sales Tax Act, 1957, because the Deputy Commissioner's order was based on the law as it stood at the time. According to the appellants, the revisional authority should judge the correctness of the order based on the law as it existed when the order was passed, not based on subsequent changes or judicial decisions.

The court examined Section 20(1) of the Act, which allows the Board of Revenue to "suo motu call for and examine the record of any order passed or proceeding recorded by any authority, officer or person subordinate to it... for the purpose of satisfying itself as to the legality or propriety of such order or as to the regularity of such proceeding and may pass such order in reference thereto as it thinks fit."

The court rejected the appellants' argument, stating that an appeal is a continuation of the original proceeding, and the appellate tribunal has powers coextensive with those of the original tribunal. The court emphasized that it is competent for the appellate authority to take note of changes in law that occur during the pendency of the proceedings. The court cited previous judgments, including Manepalli Venkatanarayana v. State of Andhra Pradesh and Maharaj Kumar v. Commissioner of Income-tax, to support its decision.

2. Impact of the Sales Tax Laws Validation Act, 1956, and Subsequent Judicial Decisions

The appellants were initially assessed for sales tax for the years 1953-54 and 1954-55. The Deputy Commissioner set aside these assessments following the Supreme Court's decision in Bengal Immunity Co. Ltd. v. The State of Bihar, which held that no State could impose a tax on inter-State sales until Parliament provided otherwise.

To counter the Supreme Court's ruling, the Sales Tax Laws Validation Act, 1956, was enacted, validating all assessments for sales between April 1, 1951, and September 6, 1955. The constitutionality of this Act was upheld by the Supreme Court in Sundararamier & Co. v. State of Andhra Pradesh.

The Board of Revenue, relying on the Sales Tax Laws Validation Act and subsequent judicial decisions, felt that the appellants were liable for tax on their sales in Hyderabad State up to September 6, 1955. The Board issued a notice to the appellants proposing to restore the assessments made by the Sales Tax Officer, limiting the tax demand to the amount actually collected by the dealers.

The court upheld the Board of Revenue's decision, stating that the revisional jurisdiction could be properly invoked in this case. The court emphasized that the appellate and revisional jurisdictions are coextensive, and the Board of Revenue was within its rights to take note of the changes in law and judicial decisions that occurred after the Deputy Commissioner's order.

3. Adequacy of the Opportunity Given to the Appellants to File Objections

The appellants argued that they were not given a reasonable opportunity to file objections to the notice issued by the Board of Revenue. They were given a week's time to file objections but requested two months, which was denied.

The court found that the week's time given to the appellants was sufficient and reasonable. The court noted that the request for two months' time was likely rejected to avoid the proceedings becoming barred by limitation. Additionally, the court observed that the appellants did not specify any substantial objections they could have raised within the extended time.

The court concluded that the appellants were not denied a reasonable opportunity to show cause against the proposed action by the Board of Revenue.

Conclusion:

The court dismissed the appeal, upholding the Board of Revenue's exercise of revisional jurisdiction and the restoration of the assessments made by the Sales Tax Officer. The court also found that the appellants were given a reasonable opportunity to file objections. The appeal was dismissed with costs, and the advocate's fee was set at Rs. 100.