1972 (1) TMI 90 - HC - VAT and Sales Tax

Summary

Issues:
1. Estoppel from raising a legal plea about non-taxability of admitted turnover.
2. Lawfulness of refusing relief on admitted turnover due to failure to raise legal plea before appellate authority.

Analysis:
The judgment pertains to two references under section 11(1) of the U.P. Sales Tax Act involving an assessee dealing in foodgrains, cotton, and oil-seeds. The questions raised revolve around the estoppel of raising a legal plea regarding the non-taxability of a commodity for which turnover was admitted and tax paid, and the legality of denying relief on admitted turnover due to failure to raise a legal plea before the appellate authority. The turnovers in question were for the assessment years 1962-63 and 1963-64, specifically related to cotton. The Sales Tax Officer disputed the turnovers declared by the assessee and determined higher turnovers for both years, leading to appeals and subsequent revisions.

The Judge (Revisions) acknowledged that the turnover of cotton was not taxable during the relevant assessment years but refused to grant relief on the tax already paid by the assessee on the admitted turnover. This decision was based on the assessee admitting liability and paying tax on the declared turnover while filing appeals, thus precluding the challenge to the payment of tax on that turnover in revision. The court reframed the first question to address whether the assessee was barred from raising the plea about the non-taxability of the admitted turnover of cotton.

The legal framework under sections 7, 9, and 10(3) of the U.P. Sales Tax Act was crucial in determining the scope of appeals and revisions. Section 9 allows appeals against disputed tax amounts, not admitted tax, with accompanying proof of payment. Rule 66 specifies the contents of the memorandum of appeal, emphasizing that appeals can only challenge disputed tax amounts. Similarly, the proviso to section 10(3) limits revision applications to the issues raised in the appeal. Therefore, an assessee cannot contest the liability to pay admitted tax in revision if not questioned during the appeal process.

Ultimately, the court affirmed that when an assessee admits liability for tax on declared turnover during appeal filing and does not challenge the admitted tax, they cannot contest the liability in revision. Consequently, the first question, as reframed by the court, was answered affirmatively, rendering the second question moot. The Commissioner, Sales Tax, was awarded costs, and the reference was answered accordingly.