1972 (3) TMI 81 - HC - VAT and Sales Tax

Summary

Issues: Challenge to the validity of section 13-A of the Orissa Sales Tax Act and the notices issued under it. Dispute regarding arrear tax dues and applicability of section 13-A to the petitioner and a non-resident company.

Analysis:
1. The petitioner sought a declaration that section 13-A of the Orissa Sales Tax Act was ultra vires the Constitution and requested the quashing of notices issued under that section. The petitioner, a dealer under the Act, was assessed to sales tax for certain years, and additional tax demands were raised. Notices were issued to pay the arrear tax, leading to the challenge of the order under section 13-A of the Act.

2. The dispute centered around the excess amount shown in the notices, which were claimed to relate to a private limited company associated with the petitioner. The Commercial Tax Officer argued that the petitioner, also a director of the company, could be deemed a dealer under the Act, justifying action under section 13-A for both the petitioner's firm and the company's arrears.

3. The Court noted discrepancies in the arrear amounts mentioned in the notices and the counter-affidavit, indicating arrears from multiple registered dealers. While acknowledging the authority to take action against the petitioner for the company's arrears, the Court found the notices flawed due to the lack of clarity and statutory compliance.

4. Despite recognizing the petitioner's association with the non-resident company, the Court emphasized the necessity for proper notice compliance and clarity in identifying the defaulting parties. The Court highlighted the statutory requirements for notices under section 13-A and found the notices lacking in specifying the arrears accurately.

5. Ultimately, the Court allowed the writ petition, quashing the notices issued by the Assistant Sales Tax Officer. The Court clarified that the taxing department could initiate appropriate action under section 13-A in compliance with the law. The judgment was delivered by two judges, with Justice Das concurring with the decision to partly allow the petition.

This detailed analysis covers the issues raised in the judgment, addressing the challenge to the validity of section 13-A, the dispute over arrear tax dues, and the Court's findings regarding the notices issued under the Orissa Sales Tax Act.