1972 (4) TMI 82 - HC - VAT and Sales Tax

Summary

Issues:
1. Validity of service of notice under section 21 of the U.P. Sales Tax Act.
2. Interpretation of the term "member of his family" under rule 77(b) of the U.P. Sales Tax Rules.
3. Applicability of section 21 and its implications on assessment proceedings.

Analysis:
The judgment pertains to a reference under section 11(1) of the U.P. Sales Tax Act initiated by the assessee, who is a foodgrains dealer, seeking exemption under rule 20-B of the U.P. Sales Tax Rules for the assessment year 1956-57. An exemption order was issued, but the assessee failed to pay the exemption fee by the specified date, leading to the department passing an assessment order under rule 23. The key contention raised was regarding the service of notice under section 21, with the department claiming it was served on the assessee's brother, while the assessee disputed the validity of such service.

The revising authority raised three questions for opinion, which were subsequently refined by the court to focus on two main issues. Firstly, whether the service of notice under section 21 to the assessee's brother, who had no business connection, constituted valid service under rule 77(b) of the U.P. Sales Tax Rules. The court emphasized that for valid service, the individual served must be an adult male member residing with the family, which was not the case here. Consequently, the court held that the notice under section 21 had not been validly served.

Secondly, the court addressed the necessity of serving a notice under section 21 for the Sales Tax Officer to assume jurisdiction. Given the invalid service of notice in this case, the court did not delve into the applicability of section 21. It was emphasized that without proper service of notice, the officer cannot exercise jurisdiction under section 21. Therefore, the court answered the second question in favor of the assessee and against the department, while not providing an answer to the first question.

Ultimately, the court ruled in favor of the assessee, concluding that the notice under section 21 was not validly served, thereby impacting the jurisdiction of the Sales Tax Officer. The assessee was awarded costs, and the reference was answered accordingly.