1963 (7) TMI 75 - HC - VAT and Sales Tax

Summary

Issues:
1. Validity of the order of the Sales Tax Officer under section 30 of the U.P. Sales Tax Act.
2. Jurisdiction of the High Court to entertain a writ petition under Article 226 despite the availability of an alternative remedy.
3. Compliance with the principles of natural justice in quasi-judicial proceedings before the Sales Tax Officer.
4. Interpretation of the condition precedent for entertaining an application under section 30 regarding the payment of admitted tax.

Detailed Analysis:
1. The petitioner challenged the order of the Sales Tax Officer under section 30 of the U.P. Sales Tax Act, which refused to entertain the application for setting aside an ex parte assessment. The Sales Tax Officer held that the condition precedent for hearing such an application was the payment of "tax admitted to be due." The petitioner disputed any tax liability, leading to the refusal of the application without a hearing. The High Court found that the Sales Tax Officer erred in his interpretation of the condition precedent and quashed the order, directing a fresh disposal of the application in accordance with the law.

2. The High Court addressed the jurisdictional issue of entertaining a writ petition under Article 226 despite the availability of an alternative remedy through an appeal under section 9. Citing Supreme Court precedents, the High Court clarified that the existence of an alternative remedy does not bar the High Court's jurisdiction if the order prejudicial to the petitioner violates principles of natural justice. In this case, where the Sales Tax Officer disposed of the application without affording an opportunity to the petitioner, the High Court held that the petitioner's writ petition was maintainable, overruling the preliminary objection.

3. Emphasizing the quasi-judicial nature of proceedings before the Sales Tax Officer, the High Court highlighted the requirement to adhere to the principles of natural justice, equity, and good conscience. Referring to various legal precedents, including Supreme Court decisions, the High Court reiterated that even in cases where there is no direct adversarial contest, the authority must act judicially if required by statute. In this context, the High Court found a clear violation of the principles of natural justice in the Sales Tax Officer's actions, justifying the exercise of writ jurisdiction.

4. The High Court delved into the interpretation of the condition precedent for entertaining an application under section 30 regarding the payment of admitted tax. It noted that in cases where the liability to tax is denied, determining the admitted tax becomes challenging. The Court clarified that the Legislature left the definition of "amount of tax admitted to be due" to the assessee's discretion, especially in situations where no return was filed. Consequently, the High Court held that the Sales Tax Officer erred in requiring the payment of admitted tax as a condition precedent and issued a writ quashing the order.

In conclusion, the High Court allowed the petition, highlighting the errors in the Sales Tax Officer's order, affirming the jurisdiction of the High Court to entertain the writ petition, emphasizing compliance with natural justice principles in quasi-judicial proceedings, and clarifying the interpretation of the condition precedent for setting aside an assessment under section 30 of the U.P. Sales Tax Act.