1962 (7) TMI 28 - HC - VAT and Sales Tax

Summary

Issues:
1. Validity of rule 12-A under the U.P. Sales Tax Act in relation to the right of a dealer to produce evidence to rebut the presumption of sale to a consumer.
2. Interpretation of the rule-making authority's powers under section 24 of the Act in framing rule 12-A.
3. Whether rule 12-A abridges or curtails the rights conferred on a dealer under section 3-AA of the U.P. Sales Tax Act.

Analysis:
The judgment pertains to a petition under Article 226 seeking the quashing of a sales tax assessment order. The petitioner claimed exemption for a turnover related to the sale of oil-seeds, arguing they were sold to dealers for resale and not to consumers. The assessment was for the year 1957-58 under section 3-AA of the U.P. Sales Tax Act. The key issue revolved around the validity of rule 12-A, requiring a certificate in Form III-A for exemption. The petitioner contended that the rule restricted the right to produce evidence beyond the specified certificate, contrary to section 3-AA. The court analyzed the nature of the right conferred by section 3-AA, emphasizing the distinction between the right to rebut a presumption and the choice of materials for proof.

Regarding the interpretation of the rule-making authority's powers under section 24, the court examined the purpose of the Act to levy sales tax and the authority to make rules for assessment procedures and forms. It concluded that rule 12-A fell within the ambit of the rule-making power and was validly made to carry out the Act's purposes. The judgment highlighted that the rule did not diminish the rights granted under section 3-AA but provided a specific mode of proof for exemption.

Further, the court addressed the argument that rule 12-A curtailed the rights conferred on a dealer under section 3-AA. It emphasized that both provisions were part of the same statute and must be read together to determine the legislative intent. The court rejected the contention that the rule infringed on the dealer's rights, stating that the power under section 3-AA was not limited by the rule. Citing legal precedents, the court clarified that a statutory provision could be curtailed by a rule if there was a specific provision for such curtailment in the statute.

Ultimately, the court dismissed the petition, upholding the validity of rule 12-A under the U.P. Sales Tax Act. It concluded that the rule did not infringe on the rights granted to dealers under section 3-AA and was made within the rule-making authority's powers conferred by section 24 of the Act. The judgment emphasized the importance of interpreting statutory provisions in harmony to ascertain the true legislative intent and upheld the rule as a valid means of proof for exemption from sales tax.