1969 (11) TMI 74 - HC - VAT and Sales Tax

Summary

Issues:
1. Assessment of sales tax for the year 1963-64.
2. Disputed tax liability and remittance of tax.
3. Applicability of second proviso to section 34.
4. Effect of a rectification order under section 43 on the right of appeal.
5. Interpretation of section 43(3) and section 34 in relation to rectification orders.

Analysis:

The High Court judgment pertains to the assessment of sales tax for the year 1963-64. The revision-petitioner, a dealer in French polish, was assessed to sales tax on a taxable turnover of Rs. 1,15,943.25, with a total tax due of Rs. 2,764.69. The petitioner disputed the tax liability, particularly an amount of Rs. 2,187.30, while remitting only Rs. 536.13 of the admitted tax along with the appeal memorandum. The Appellate Assistant Commissioner dismissed the appeal on the grounds that the tax on the admitted turnover had not been deposited as required by law. However, the assessing authority rectified the original assessment, reducing the tax due to Rs. 2,228.56 and the surcharge to Rs. 111.30.

Regarding the remittance of tax, the petitioner failed to fully deposit the admitted tax when filing the appeal before the Appellate Assistant Commissioner, contravening the second proviso to section 34, which requires satisfactory proof of payment for an appeal to be entertained. The petitioner argued that the rectification order under section 43 superseded the original assessment order, entitling them to file a subsequent appeal. The court rejected this argument, emphasizing that section 43(3) only applies to rectifications enhancing an assessment or penalty, not those reducing it. Thus, a rectification order reducing the assessment does not grant the right of appeal under section 34.

The Tribunal correctly held that the original assessment had become final, and the petitioner could not revive the right of appeal based on the rectification order. The Tribunal's decision was upheld by the High Court, stating that the rectification order did not confer a new right of appeal to the petitioner. Consequently, the petition was dismissed with costs, affirming the Tribunal's decision and denying interference with its correctness.