1966 (1) TMI 67 - HC - VAT and Sales Tax

Summary

Issues:
1. Validity of reassessment proceedings due to alleged mala fides.
2. Existence of petitioner-firm during the period of reassessment.
3. Jurisdiction of Sales Tax Officer for reassessment.

Analysis:
The judgment pertains to Civil Writs challenging reassessment orders for sales tax. The petitioners raised three points: mala fides in reassessment initiation, non-existence of the petitioner-firm during the assessed period, and jurisdictional authority for reassessment. The court ruled in favor of the petitioners solely on the jurisdictional issue, rendering further discussion unnecessary. The court referenced Section 11-A of the Bengal Finance (Sales Tax) Act, 1941, which empowers the Commissioner to reassess under-assessed turnovers. Notably, the Commissioner's power delegation under Section 15 and Rule 78 of the Delhi Sales Tax Rules was scrutinized. The court highlighted that the Sales Tax Officer's reassessment, purportedly delegated by the Commissioner, lacked legal basis due to the absence of Section 11-A in the delegation schedule.

The crucial question arose regarding the retrospective amendment to include Section 11-A in the delegation schedule. Drawing from a Full Bench decision, the court emphasized that retrospective delegation of powers is impermissible, citing precedents that executive bodies lack authority to confer retrospective effect unless explicitly granted by the Legislature. The judgment underscored the constitutional principle that only the Legislature can validate judicial acts retrospectively, not the executive. Various judicial pronouncements were cited to support the view that retrospective validation of void judicial orders requires a clear legislative mandate, which was absent in this case.

The court rejected the argument that the Chief Commissioner's retrospective rule-making power validated the reassessment orders. It distinguished a Madras case permitting retrospective rules under specific statutory provisions, emphasizing the absence of such provisions in the present Act. The judgment concluded by quashing the impugned orders, allowing respondents to initiate fresh reassessment proceedings in compliance with the law. No costs were awarded, and the petitions were allowed.

In summary, the judgment focused on the jurisdictional aspect of reassessment proceedings, highlighting the invalidity of the Sales Tax Officer's actions due to unauthorized delegation. It emphasized the constitutional limitations on retrospective validation of judicial acts by executive bodies, ultimately annulling the impugned orders and directing compliance with legal procedures for reassessment.