1956 (6) TMI 13 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Jurisdiction and appointment of the Special Commercial Tax Officer (Evasions).
2. Consistency of the Special Commercial Tax Officer's appointment with the Andhra Pradesh General Sales Tax Act and Rules.
3. Alleged violation of Article 14 of the Constitution due to unregulated powers of the Special Commercial Tax Officer.
4. Validity of Section 5A of the Andhra Pradesh General Sales Tax Act under Article 14 of the Constitution.

Detailed Analysis:

1. Jurisdiction and Appointment of the Special Commercial Tax Officer (Evasions):
The petitioners argued that the Special Commercial Tax Officer (Evasions) lacked jurisdiction to assess their turnovers, contending that their cases should have been handled by the Commercial Tax Officer of Kakinada. The court examined Section 2(1)(b) of the Andhra Pradesh General Sales Tax Act, which defines "assessing authority" and allows the State Government to authorize any person to make assessments. The court found no substance in the petitioners' argument, stating that the definition itself implied the Government's power to appoint assessing authorities. The court cited a Full Bench decision in Sreeramulu Chetty v. State of Andhra[1958] 9 S.T.C. 215, which supported this interpretation.

2. Consistency with the Andhra Pradesh General Sales Tax Act and Rules:
The petitioners contended that the appointment of the Special Commercial Tax Officer and his actions were inconsistent with Rules 7, 8, and 9 of the Act, which require dealers to submit returns to the assessing authority of the area concerned. The court clarified that while these rules mandate the submission of returns to the local assessing authority, they do not restrict the assessment to be made solely by that authority. The court emphasized that Section 4 of the Act empowers the Government to assign local limits and functions to various officers, including Special Commercial Tax Officers. The court concluded that the appointment of the Special Commercial Tax Officer (Evasions) and his jurisdiction to assess cases of evasion were consistent with the Act and the Rules.

3. Alleged Violation of Article 14 of the Constitution:
The petitioners argued that the Special Commercial Tax Officer's unregulated powers to select cases for assessment were arbitrary and violated Article 14 of the Constitution. The court referred to Clause (iii) of the proviso to paragraph II of the impugned notification, which allows the Special Commercial Tax Officer to exercise assessing authority in cases where suppression or omission of transactions is detected. The court noted that the procedure for assessment by both the Commercial Tax Officer and the Special Commercial Tax Officer is the same, and there is no invidious discrimination among the assessees. The court found that the notification provided sufficient guidance for the selection of cases and did not violate Article 14, as it did not create unequal treatment among equals.

4. Validity of Section 5A under Article 14 of the Constitution:
The petitioners challenged the validity of Section 5A, arguing that it created an invidious distinction between assessees with turnovers above and below three lakhs, thus violating Article 14. The court referred to its previous judgment in W.P. No. 1207 of 1964, where it had rejected a similar contention based on an earlier Bench decision. The court reaffirmed its stance, finding no merit in the argument and upholding the validity of Section 5A.

Conclusion:
The writ petitions were dismissed, and the court upheld the jurisdiction and appointment of the Special Commercial Tax Officer (Evasions), finding no inconsistency with the Act or Rules. The court also rejected the claims of violation of Article 14 and upheld the validity of Section 5A. The petitioners were ordered to bear the costs, with an advocate's fee of Rs. 50 in each case.