1971 (9) TMI 165 - HC - VAT and Sales Tax

Summary

Issues:
1. Interpretation of the first proviso to section 9 of the U.P. Sales Tax Act regarding the payment of admitted tax for entertaining appeals.
2. Calculation of the admitted tax rate based on turnover for the assessment years 1961-62 and 1963-64.
3. Determination of whether the assessee fulfilled the requirement of depositing admitted tax at the prescribed rate.
4. Assessment of liability to pay tax when challenging the jurisdiction of the Sales Tax Officer.

Analysis:

The judgment pertains to a reference under section 11(1) of the U.P. Sales Tax Act involving an assessee who is a manufacturer and dealer in bricks. The Sales Tax Officer estimated the turnover for two assessment years higher than disclosed by the assessee and levied tax at different rates. The assessee disputed the tax rates and jurisdiction of the Sales Tax Officer, leading to appeals and subsequent revisions. The High Court rephrased the questions and addressed three key issues.

1. The court clarified that the admitted tax for appeal purposes should be calculated based on the rates specified in relevant notifications, not the general rate under section 3. As bricks were taxable under section 3-A, notifications set the tax rates at 6% and 7% for the respective years. The court held that the appropriate rate for determining the admitted tax was as per the notifications, not the general rate, as contended by the assessee.

2. The court found that the assessee failed to deposit the admitted tax at the prescribed rates of 6% and 7%, instead of the lower rate of 2% claimed by the assessee. Consequently, the court ruled that the assessee did not fulfill the requirement of depositing the admitted tax as per the first proviso to section 9 of the Act, rendering the appeals non-entertainable.

3. Regarding the liability to pay tax when challenging the Sales Tax Officer's jurisdiction, the court noted that the assessee had admitted to paying tax at 2% in the appeal memorandum. As the admitted tax was found deficient and the jurisdiction challenge did not absolve the assessee from payment, the court held that the assessee was not exempt from tax payment based on the jurisdiction objection.

In conclusion, the court answered all questions against the assessee, affirming the tax department's position and awarding costs to the department. The judgment emphasized adherence to prescribed tax rates for calculating admitted tax, fulfilling payment requirements for appeals, and maintaining tax liability despite jurisdictional challenges.