1972 (4) TMI 91 - HC - VAT and Sales Tax

Summary

Issues:
Challenge to sales tax demand based on assessments for multiple years; Claim of entitlement to exemption under G.O. No. 4014, Revenue, dated 20th September, 1961; Applicability of Supreme Court decision on the element of sale in members' clubs; Maintainability of writ petition against demand without challenging assessments; Discrepancy in petitioner's submission regarding supply of refreshments to students; Failure to raise factual position during original assessments.

Analysis:
The petitioner, an association, contested a sales tax demand based on assessments spanning from 1961-62 to 1966-67. The association sought exemption under G.O. No. 4014, Revenue, dated 20th September, 1961, pertaining to hostels run by educational institutions. Despite the petitioner's attempts for exemption, the sales tax authorities assessed the association for sales tax on refreshments sold to students and members. The petitioner did not challenge the assessments directly but disputed the demand issued post-assessments becoming final. The petitioner argued that the sales were not liable to tax, citing a Supreme Court decision on the element of sale in members' clubs.

The court noted that the petitioner failed to challenge the assessments themselves, focusing solely on the demand. It emphasized that if the assessments were erroneous, the proper recourse would be to challenge them through statutory remedies rather than seeking to quash the demand alone. The court highlighted the distinction between assessments based on ultra vires provisions, which could render them null and void, and assessments deemed erroneous on facts, as in this case. The court referenced previous judgments to underscore the importance of availing statutory remedies before seeking relief under Article 226.

Regarding the petitioner's contention on the Supreme Court decision, the court found discrepancies in the petitioner's submission regarding the supply of refreshments to students. The petitioner's claim that the hostel, not the association, supplied refreshments contradicted the facts presented earlier. The court emphasized that such factual discrepancies should have been raised during the original assessments. As the petitioner failed to challenge the assessments based on these grounds, the court dismissed the writ petition, highlighting the petitioner's failure to establish its case and the importance of raising factual issues during assessments.

In conclusion, the court dismissed the writ petition, emphasizing the petitioner's failure to challenge assessments directly and the discrepancies in its submissions regarding the supply of refreshments. The court underscored the importance of raising factual issues during assessments and utilizing statutory remedies before seeking relief through writ petitions.