1968 (1) TMI 45 - HC - VAT and Sales Tax

Summary

Issues:
1. Jurisdiction of the Commissioner of Sales Tax to revise an assessment after a significant period.
2. Interpretation of the powers of revision under section 22(5) of the C.P. and Berar Sales Tax Act.
3. Validity of the notice issued by the Commissioner of Sales Tax under section 39(2) of the Madhya Pradesh General Sales Tax Act.
4. Impact of the repeal of the C.P. and Berar Sales Tax Act on the revisionary powers of the Commissioner of Sales Tax.

Analysis:

1. The applicant, a P.W.D. contractor, sought relief through a writ petition under Article 226 challenging a notice issued by the Commissioner of Sales Tax, Madhya Pradesh. The notice aimed to enhance the tax payable by the applicant for a period dating back to 1954-55. The Court found that initiating revision proceedings after a lapse of nearly ten years from the original assessment was beyond the jurisdiction of the Commissioner of Sales Tax.

2. The Court delved into the provisions of the C.P. and Berar Sales Tax Act, specifically focusing on section 22(5) and section 11A. It was established that the power of revision under section 22(5) for enhancing tax could not be exercised after the expiry of the period specified under section 11A. The Court emphasized that revisionary powers cannot be invoked for turnovers falling within the ambit of section 11A.

3. The Court scrutinized the validity of the notice issued by the Commissioner of Sales Tax under section 39(2) of the Madhya Pradesh General Sales Tax Act. It was observed that the notice, issued beyond the permissible three-year limit from the date of the order sought to be revised, was invalid due to the non-existence of the revisionary power after the specified period.

4. Furthermore, the impact of the repeal of the C.P. and Berar Sales Tax Act on the revisionary powers of the Commissioner of Sales Tax was analyzed. The Court highlighted the legal fiction introduced by the new Act, deeming the original assessment to have been made under the new Act. This legal fiction, coupled with the preservation of rights and liabilities under the repealed Act, led to the conclusion that the applicant had acquired a right not to be reassessed after the expiration of the specified period.

In conclusion, the Court allowed the application, quashed the notice issued by the Commissioner of Sales Tax, and directed the Commissioner to refrain from acting on the notice. The judgment emphasized the limitations on revisionary powers and the significance of statutory timelines in tax assessment matters.