1964 (7) TMI 17 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Jurisdiction of the Additional Assistant Excise and Taxation Commissioner to reopen assessments after a long period.
2. Jurisdiction to levy and collect tax under the Central Sales Tax Act on inter-State sales.

Detailed Analysis:

Issue 1: Jurisdiction to Reopen Assessments

The appellant-company challenged the jurisdiction of the Additional Assistant Excise and Taxation Commissioner to reopen assessments for the years 1957-58, 1958-59, and 1959-60, arguing that the reopening was beyond the three-year limitation period specified in Section 11-A of the East Punjab General Sales Tax Act, 1948. The Commissioner contended that Section 11-A did not apply as he was exercising his revisionary powers under Section 21 of the same Act, which did not have a time limitation.

The court held that the Additional Assistant Excise and Taxation Commissioner was competent to revise the orders of the Assessing Authority at any time under Section 21, which is separate from the reassessment powers under Section 11-A. The legislature did not impose a time limitation on the Commissioner's revisionary powers, indicating an intention to allow revisions at any time. Thus, the first ground of objection failed.

Issue 2: Jurisdiction to Levy and Collect Tax on Inter-State Sales

The appellant argued that the tax under the Central Sales Tax Act should be levied and collected in Maharashtra, from where the movement of goods commenced, rather than in Punjab where the documents of title were transferred. The court referred to the Supreme Court decision in Tata Iron and Steel Co. Ltd. v. S.R. Sarkar, which interpreted Section 9 of the Central Sales Tax Act as it stood before October 1, 1958. The decision stated that tax should be levied in the state where the sale was effected if the sale was by transfer of documents during movement.

However, post-October 1, 1958, Section 9 of the Central Sales Tax Act was amended to specify that tax on inter-State sales should be levied and collected by the state from which the movement of goods commenced. Since the sales in question were inter-State and the movement of goods started from Maharashtra, the court concluded that only Maharashtra authorities had the jurisdiction to levy and collect the tax.

The court found that the Additional Assistant Excise and Taxation Commissioner of Punjab had no jurisdiction to levy the tax on these sales. As the Commissioner had issued notices requiring the appellant to appear and submit to his jurisdiction, the court decided it was proper to quash these notices to prevent the Commissioner from exercising jurisdiction he did not possess.

Conclusion:

The court allowed the appeals and quashed the notices issued by the Additional Assistant Excise and Taxation Commissioner on August 18, 1962. Each party was ordered to bear its own costs.