1970 (4) TMI 139 - HC - VAT and Sales Tax

Issues Involved:
1. Subordination of the Commercial Tax Officer to the Deputy Commissioner of Commercial Taxes.
2. Estoppel against the commercial tax authorities based on representations by the Revenue Board.

Issue-wise Detailed Analysis:

1. Subordination of the Commercial Tax Officer to the Deputy Commissioner of Commercial Taxes:
The petitioner-firm argued that the Commercial Tax Officer was not subordinate to the Deputy Commissioner of Commercial Taxes and thus, the Deputy Commissioner was not competent to revise the orders of the Commercial Tax Officer under section 20(2) of the Andhra Pradesh General Sales Tax Act. However, the court found no substance in this submission, noting that rule 33-A of the Sales Tax Rules explicitly specifies that the Commercial Tax Officer is among the authorities subordinate to the Deputy Commissioner for the purposes of section 20.

2. Estoppel Against the Commercial Tax Authorities:
The petitioner contended that based on a 1957 clarification by the Hyderabad Kirana Merchants' Association, the Revenue Board had stated that badam, chironji, and pista would be treated as oil-seeds. The petitioner acted on this representation and did not collect sales tax from consumers. The petitioner argued that the commercial tax authorities were estopped from reopening the assessments and including the sales of these commodities in the total turnover.

The court rejected this argument, emphasizing that under section 5(1) of the Act, sales tax is leviable on the turnover of every dealer whose total turnover is not less than Rs. 10,000. Section 6 prescribes that in the case of declared goods specified in the Third Schedule, sales tax shall be levied at the rate and only at the point of sale or purchase as specified in the Third Schedule. The court noted that oil-seeds are specified as declared goods in the Third Schedule, and the point of levy is the point of purchase in the State.

The court further clarified that the assessing authority must determine whether a commodity is an oil-seed and whether the dealer was the first purchaser within the State. This decision is subject to appeal and revision, but the Act does not authorize the Board of Revenue or any other authority to issue directions to the assessing authority to tax or not to tax any commodity as declared goods. Any representation or instructions by the Board of Revenue would be beyond its statutory powers and thus non-binding.

The court cited several precedents, including Robertson v. Minister of Pensions, Falmouth Boat Construction Co. Ltd. v. Howell, and Century Spinning & Manufacturing Company Ltd. v. The Ulhasnagar Municipal Council, to support its conclusion that there can be no estoppel against a statute. The statutory right and duty to levy tax cannot be subject to any bargain or representation made by any authority, and enforcing such a bargain would be against public policy.

The court also referred to the observations of Hidayatullah, J., in Mathra Parshad and Sons v. State of Punjab, and Chandra Reddy, C.J., in Venkateswara Oil Mills v. State of Andhra Pradesh, which reinforced the principle that there can be no estoppel against a statute.

Conclusion:
The court dismissed the writ petition, holding that the Deputy Commissioner of Commercial Taxes was competent to revise the orders of the Commercial Tax Officer and that the petitioner could not rely on the representation by the Revenue Board to avoid the statutory obligation to pay sales tax. The court emphasized that statutory duties and rights cannot be overridden by representations or assurances from authorities, and there can be no estoppel against a statute. The writ petition was dismissed with costs, and the advocate's fee was set at Rs. 100.

Petition dismissed.

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