1969 (5) TMI 54 - HC - VAT and Sales Tax

Issues Involved:

1. Preliminary objection regarding the petitioner's statutory remedies under the U.P. Sales Tax Act.
2. Validity of Rule 12-A under the U.P. Sales Tax Act.
3. Assessment orders and the rejection of appeals due to defects in the memoranda.
4. Refusal of the assessing authority to consider Form III-A filed by the petitioner.
5. Exemption of sales of cotton blankets and yarn under Section 3-AA of the U.P. Sales Tax Act.
6. Rejection of appeals by the appellate authority due to non-disclosure of tax admitted to be due.

Issue-wise Detailed Analysis:

1. Preliminary Objection:
The respondents raised a preliminary objection that the petitioner should be referred to his statutory remedies under the U.P. Sales Tax Act. The court rejected this objection, noting that the writ petitions were filed against assessment orders, and while pending, the petitioner also filed appeals which were dismissed as defective. The court emphasized that questions affecting a large number of cases should be resolved expeditiously in the public interest.

2. Validity of Rule 12-A:
The petitioner challenged Rule 12-A as ultra vires. The court held that this ground could not be entertained by authorities under the U.P. Sales Tax Act, citing the Supreme Court's decision in Beharilal Shyamsunder v. Sales Tax Officer, Cuttack, which stated that the question of ultra vires was foreign to the jurisdiction of statutory authorities. The court found Rule 12-A to be a rule of evidence, aiding dealers in proving that sales were not made to consumers. It prescribed certification by the purchasing dealer as the mode of proof but did not exclude other modes in exceptional cases.

3. Assessment Orders and Rejection of Appeals:
The appeals were dismissed as defective because the petitioner failed to disclose the tax admittedly due in the memoranda. The appellate authority rejected the petitioner's request to amend the memoranda. The court held that the appellate authority's order was unsustainable, as there was no statutory requirement for a statement of admitted tax in the memorandum of appeal. The court referenced the Supreme Court's decision in M/s. Lakshmiratan Engineering Works Ltd. v. Assistant Sales Tax Commissioner, which allowed proof of payment of admitted tax at any time before the appeal is entertained.

4. Refusal to Consider Form III-A:
The assessing authority refused to consider Form III-A filed by the petitioner during the assessment proceedings because they were not filed with the quarterly returns. The court found this refusal erroneous, stating that forms could be filed at any time before the assessment order is made. The court emphasized that Rule 12-A should be construed to provide a convenient mode of proving that the purchase was for resale in the same condition, not the only mode.

5. Exemption of Sales under Section 3-AA:
The court discussed whether sales of cotton blankets and yarn could be exempted from tax under Section 3-AA. The Sales Tax Officer had refused exemption for yarn sales because certificates in Form III-A were not submitted with quarterly returns or within a specially obtained time. The court held that Rule 12-A did not require certificates to be filed with quarterly returns and that the Sales Tax Officer's interpretation was unreasonable and restricted the assessee's right to obtain an exemption.

6. Rejection of Appeals by Appellate Authority:
The appellate authority rejected the appeals solely because the memoranda did not disclose the tax admitted to be due. The court found this rejection improper, noting that the memoranda had been admitted, and the appellate authority had the power to allow amendments. The court emphasized that the right to appeal is a vested right and cannot be taken away by procedural defects. The court referenced the Supreme Court's decisions in Garikapati Veeraya v. N. Subbiah Chowdhry and Others and Mela Ram & Sons v. Commissioner of Income-tax, which supported the petitioner's right to amend the memoranda.

Conclusion:
The court quashed the orders of the appellate authority dismissing the appeals and directed it to hear them again and dispose of them in accordance with the law. The court accepted the undertaking that the petitioner would not be treated as in default for the balance of the tax assessed while the appeals were pending. The parties were directed to bear their own costs.

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