1965 (11) TMI 142 - HC - VAT and Sales Tax

Summary

Issues:
Appeal against rejection of application under Article 226 of the Constitution of India for refusal to issue a rule nisi upon the application.

Detailed Analysis:
The case involved a dispute regarding the assessment of sales tax by the Commercial Tax Officer under the Bengal Finance (Sales Tax) Act, 1941. The petitioners, structural contractors and builders, were assessed based on a rule that had been declared illegal and ultra vires by the Calcutta High Court in a previous judgment. Despite this, the Commercial Tax Officer proceeded with the assessment under the same rule, ignoring the decision of the High Court. The petitioners expected the assessment to be revised following a subsequent Supreme Court judgment upholding the High Court's decision on the rule's legality. However, the tax authorities did not take any action to rectify the assessment.

The petitioners pursued appeals and revisions at various levels, but their petitions were rejected on grounds of delay and limitation. The main contention raised was that the original assessment order was a nullity since it was based on an illegal rule. The petitioners argued that the authorities had exceeded their jurisdiction by upholding the assessment under a rule that had been invalidated. The petitioners sought relief under Article 226 of the Constitution, challenging the legality of the assessment orders and requesting a writ of certiorari to quash the proceedings.

The judges noted that the authorities had acted in disregard of the law declared by the High Court and the Supreme Court, emphasizing the importance of adherence to legal principles by administrative tribunals. Citing a Supreme Court decision, the judges highlighted that tribunals under the superintendence of the High Court must conform to the law laid down by the Court. Therefore, the assessment order made under an illegal rule was deemed invalid, and the proceedings were considered without jurisdiction.

Ultimately, the Court allowed the appeal, setting aside the order rejecting the petition and directing the issuance of a rule nisi. The respondents were required to show cause why a writ of certiorari should not be issued to quash the impugned orders and proceedings. An injunction was also granted to restrain the respondents from realizing the sales tax until the rule was disposed of. The petitioners were granted liberty to amend their petition to include the ground that the order challenged was a nullity. Costs of the appeal were to be considered in the application to be heard.

In conclusion, the Court found in favor of the petitioners, emphasizing the importance of upholding legal principles and ensuring that administrative authorities comply with the law as declared by the courts.