1965 (8) TMI 71 - HC - VAT and Sales Tax

Summary

Issues:
1. Whether arrears of sales tax can be recovered under the U.P. Zamindari Abolition and Land Reforms Act.
2. Whether the Collector or Tahsildar has the authority to initiate proceedings for the recovery of arrears as land revenue.

Detailed Analysis:
The judgment of the Allahabad High Court addressed three cases involving the recovery of arrears of sales tax under the U.P. Zamindari Abolition and Land Reforms Act. The appellants challenged the proceedings initiated by the Tahsildar for recovery on two grounds. Firstly, they argued that the U.P. Zamindari Abolition Act did not cover the recovery of sales tax arrears. Secondly, they contended that only the Collector, not the Tahsildar, had the authority to commence such proceedings. However, the single judge dismissed the writ petitions based on these grounds.

The appellants' counsel, Mr. Chatterji, reiterated the arguments before the High Court. He claimed that the U.P. Zamindari Abolition Act solely pertained to the recovery of land revenue, not sales tax arrears. Mr. Chatterji's submission overlooked the provisions of section 8(8) of the Sales Tax Act and rule 50, which explicitly allowed the recovery of sales tax arrears as land revenue. The Court cited a previous case to support this interpretation, emphasizing that specific Acts create the liability for recovery as land revenue.

Mr. Chatterji further contended that only section 288 of the U.P. Zamindari Abolition Act authorized recovery. However, the Court clarified that this provision applied to arrears due before the Act's enforcement, ensuring retrospective recovery under the new legislation. Another precedent was cited to validate this interpretation, highlighting the legislative intent behind section 288.

Regarding the second issue, Mr. Chatterji argued that the Revenue Recovery Act should govern the recovery of sales tax arrears, not the U.P. Zamindari Abolition Act. Nevertheless, the Court pointed out that the two Acts were not mutually exclusive, and the U.P. Act's provisions for land revenue recovery could coexist with those of the Revenue Recovery Act.

Ultimately, the Court found no merit in the appeals. It emphasized that the Collector had rightfully directed the Tahsildar to initiate recovery proceedings for sales tax arrears as land revenue, dismissing the appellants' contentions. The judgment concluded by dismissing the appeals with costs, affirming the validity of the recovery actions under the U.P. Zamindari Abolition and Land Reforms Act.