1970 (12) TMI 70 - HC - VAT and Sales Tax

Summary

Issues:
1. Validity of assessment and penalty imposed by Assistant Sales Tax Officer.
2. Legality of notice issued by Sales Tax Officer under section 18(6) of the Act.
3. Interpretation of sections 20(1) and 39(1) of the Act.
4. Jurisdiction of Sales Tax Officer to initiate fresh proceedings.
5. Claim for refund of deposited amount.

Analysis:

1. The petitioner, a registered dealer under the M.P. General Sales Tax Act, challenged an assessment and penalty imposed for the unregistered period from 1st April, 1961, to 28th September, 1962. The Commissioner set aside the order of assessment and penalty, remanding the case to the Sales Tax Officer for disposal according to law.

2. The petitioner challenged a notice issued by the Sales Tax Officer under section 18(6) of the Act, calling for assessment and penalty for the aforementioned period. The petitioner sought to quash the notice and refund the deposited amount of Rs. 7,000, contending that the notice was invalid and the amount was withheld illegally.

3. The court analyzed sections 20(1) and 39(1) of the Act to determine the legality of the proceedings. The petitioner argued that the Sales Tax Officer's action was beyond the scope of section 39(1) and that the bar of limitation under section 18(6) applied. The court agreed, stating that the Commissioner's order did not authorize initiation of fresh proceedings by a different authority.

4. The court held that the Commissioner's order did not constitute a remand under section 39(1) but rather initiated new proceedings, which were time-barred under section 18(6). The Sales Tax Officer's notice was deemed invalid, and the court directed the refund of the deposited amount to the petitioner.

5. Regarding the claim for refund, the court emphasized that the petitioner's liability arose from the now-set-aside order by the Assistant Sales Tax Officer. As the notice for recovery was time-barred, the court found the petitioner entitled to a refund. Citing precedents, the court exercised its discretionary power under article 226 to grant the refund, considering a civil suit as a costly and cumbersome alternative.

In conclusion, the court allowed the writ petition, quashed the notice issued by the Sales Tax Officer, and directed the refund of the deposited amount to the petitioner. Each party was instructed to bear its own costs, and the security amount was to be refunded to the petitioner.