1968 (12) TMI 84 - HC - VAT and Sales Tax

Summary

Issues:
- Assessment of sales tax under the Central Sales Tax Act for the year 1967-68
- Appropriation of a sum under section 8-A(4) of the U.P. Sales Tax Act
- Validity of the appropriation and demand made by the Sales Tax Officer
- Compliance with the declaration of law by the Sales Tax Officer
- Jurisdiction of Sales Tax Officers in Uttar Pradesh
- Effect of a declaration by the Court that a statutory provision is ultra vires
- Justifiability of the Sales Tax Officer's actions
- Instructions issued by the State Government to Sales Tax Officers

Analysis:
The petitioner was assessed to sales tax for the year 1967-68 under the Central Sales Tax Act, and the Sales Tax Officer included a direction appropriating a sum under section 8-A(4) of the U.P. Sales Tax Act, leading to a writ of certiorari being sought against that order. The High Court held that the provisions of section 8-A(4) were ultra vires, and the Sales Tax Officer lacked competence to appropriate the amount and make the demand. Despite being informed of the Court's declaration, the Sales Tax Officer proceeded with the appropriation, providing reasons that were deemed unsustainable by the Court. It was emphasized that Sales Tax Officers in Uttar Pradesh are under the superintendence of the High Court and bound by its declarations of law, including the effect of declaring a provision ultra vires.

The Court clarified that a declaration of a statutory provision as ultra vires results in its deletion from the statute book, irrespective of any pending appeals. The Sales Tax Officer's argument that the petitioner had recovered the amount from customers did not justify the unauthorized appropriation. It was further noted that the petitioner was not required to seek a direction from the Court initially but could rely on the Court's declaration when contesting the Sales Tax Officer's actions. The Court found the Sales Tax Officer's attitude unjustified and unnecessary in light of the State Government's instructions to refrain from making any appropriations under section 8-A(4).

Consequently, the petition was allowed, and the order appropriating the sum under section 8-A(4) and the demand notice were quashed. The petitioner was granted costs, and the Court emphasized the obligation of Sales Tax Officers to adhere to Court declarations and instructions issued by the State Government to ensure compliance with the law.