1970 (12) TMI 81 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Whether the Deputy Commissioner surrendered his decision-making power to the Board of Revenue.
2. Whether the reassessment orders were vitiated by bias or lack of fair hearing.
3. Whether the Deputy Commissioner properly considered all contracts to determine if they were works contracts.
4. Whether the High Court should interfere under Article 226 of the Constitution to facilitate the disposal of the appeals without requiring the payment of tax.

Issue-wise Detailed Analysis:

1. Whether the Deputy Commissioner surrendered his decision-making power to the Board of Revenue:

The petitioner contended that the Deputy Commissioner reopened the assessment at the dictation of the Board of Revenue, thus surrendering his discretion. The court examined the relevant affidavits and the circular issued by the Board of Revenue dated 1st September 1964. The court noted that the circular merely invited the attention of the assessing authorities to the legal position and did not impose any binding instructions. The Deputy Commissioner had the discretion to decide whether to reopen the assessment based on the merits of each case. The court concluded that there was no evidence to suggest that the Deputy Commissioner acted merely in pursuance of the circular without applying his mind to the facts of the case. Therefore, the contention that the Deputy Commissioner surrendered his decision-making power was dismissed.

2. Whether the reassessment orders were vitiated by bias or lack of fair hearing:

The petitioner argued that the reassessment orders were biased and lacked a fair hearing. The court emphasized the principles of natural justice, which require impartiality and fairness. It noted that bias could be attributed if an authority surrendered its discretion to an outsider. However, the court found that the Deputy Commissioner did not act under the dictation of the Board of Revenue but exercised his discretion independently. The Deputy Commissioner issued two notices, received replies from the petitioner, and examined all the contracts before making the reassessment orders. The court concluded that there was no material to suggest that the Deputy Commissioner was biased or that the petitioner was denied a fair hearing.

3. Whether the Deputy Commissioner properly considered all contracts to determine if they were works contracts:

The petitioner contended that the Deputy Commissioner did not consider all the contracts to determine whether they were works contracts. The court noted that this issue involved questions of fact, which were not appropriate for determination in a writ petition. The court observed that the Appellate Tribunal, before which the appeals were pending, was competent to consider these factual questions. The court refrained from making any observations on the merits of the case and left it to the Appellate Tribunal to decide.

4. Whether the High Court should interfere under Article 226 of the Constitution to facilitate the disposal of the appeals without requiring the payment of tax:

The petitioner sought the High Court's intervention under Article 226 of the Constitution to quash the reassessment orders and facilitate the disposal of the appeals without requiring the payment of tax. The court emphasized that petitioners should not circumvent the statutory remedies available to them under taxation law. The court noted that the Appellate Tribunal required proof of payment of tax before entertaining the appeals. However, given that the writ petitions had been pending for more than two years, the court considered it reasonable for the Tribunal to dispose of the appeals expeditiously without insisting on the payment of tax. The court dismissed the writ petitions but made an observation for the Tribunal to expedite the appeals.

Conclusion:

The writ petitions were dismissed with costs, and the court made an observation for the Appellate Tribunal to dispose of the appeals expeditiously without insisting on the payment of tax, considering the circumstances of the case.