1969 (1) TMI 54 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Jurisdiction of the Sales Tax Officer in reassessment proceedings upon remand.
2. Necessity of separate proceedings under section 21 for assessing escaped turnover.

Detailed Analysis:

Jurisdiction of the Sales Tax Officer in Reassessment Proceedings Upon Remand:
The primary issue addressed in the judgment is whether the Sales Tax Officer, during reassessment proceedings initiated upon remand, was competent to assess the escaped turnover or if he was limited by the terms of the remand order. The court emphasized that the jurisdiction of the Sales Tax Officer in reassessment proceedings is controlled by the directions contained in the remand order. The remand order in this case specifically directed the Sales Tax Officer to recheck calculations and examine the tax collected and realized under section 8-A(4) from U.P. principals. The court held that the Sales Tax Officer could not exceed these directions and reassess the entire turnover. It was noted that upon the making of the original assessment order, the jurisdiction of the Sales Tax Officer comes to an end, and to reopen the assessment, he must have recourse to section 21, section 22, or section 30 of the U.P. Sales Tax Act.

Necessity of Separate Proceedings Under Section 21 for Assessing Escaped Turnover:
The court concluded that if any turnover had escaped assessment, the appropriate remedy was to initiate proceedings under section 21. The Sales Tax Officer must have a reasonable belief that turnover had escaped assessment and was required to issue a notice to the assessee before commencing such proceedings. The court cited several precedents to support its conclusion that the jurisdiction of the Sales Tax Officer upon remand is limited to the specific directions given in the remand order. Notably, the court referred to the case of M.L. Das & Sons v. Sampatmull and Budhilal v. Jagannathdas, which reinforced that the lower court or authority must adhere strictly to the terms of the remand order and cannot exceed its jurisdiction.

The judgment also discussed the case of Jugal Kishore Baldeo Sahai v. Income-tax Officer, where it was held that when an assessment order is set aside and the case is remanded, the position is as if no assessment had been made, allowing the Income-tax Officer to make a provisional assessment. However, the court distinguished this case by emphasizing that the remand order in the present case was specific and confined the Sales Tax Officer's jurisdiction.

Additionally, the court examined the case of J.K. Cotton Spinning & Weaving Mills Co. Ltd. v. Commissioner of Income-tax, where it was observed that the Income-tax Officer, when making a fresh assessment, is bound by the directions of the appellate authority but retains the same powers as in the original assessment. The court noted that the remand order in the present case did not grant such broad powers and was limited to rechecking calculations and examining tax collected under section 8-A(4).

In conclusion, the court answered the reference by stating that the Sales Tax Officer was not competent to assess the escaped turnover in the reassessment proceeding without initiating separate proceedings under section 21. The court awarded costs to the assessee, assessed at Rs. 100, and provided the same figure for counsel's fee.