1972 (8) TMI 128 - HC - VAT and Sales Tax

Summary

Issues:
1. Validity of the Amendment Act No. 20 of 1971
2. Entitlement of the petitioner to the relief claimed in the appeals

Analysis:
1. Validity of the Amendment Act:
The court referred to a previous decision in Mohan Lal Verma v. State of Uttar Pradesh and Another [1972] 29 S.T.C. 398, where it was held that the Amendment Act in question was intra vires. Therefore, the court rejected the petitioner's challenge regarding the validity of the Amendment Act.

2. Entitlement of the petitioner to the relief claimed in the appeals:
The petitioner, engaged in the business of manufacturing and selling bricks, was assessed to tax under the U.P. Sales Tax Act for certain years. Initially, a notification under section 3-A of the Act led to the petitioner being taxed at 7 per cent. However, a writ petition filed by the petitioner challenging this notification was allowed, resulting in a mandamus for a tax refund. Subsequently, the petitioner did not deposit any tax but sought to adjust the admitted tax against the refund due. The appeals filed by the petitioner were initially deemed defective due to lack of proof of payment of admitted tax. However, the appellate authority later accepted the petitioner's claim for adjustment of the refund against the admitted tax. Despite a subsequent change in law validating the tax levy on bricks, the court held that once the appeals were admitted as proper appeals, they could not be dismissed based on the change in law. The court emphasized the principle that the decision on appeal's maintainability is made at the initial hearing. The court also noted that the mandamus for the tax refund was still in effect until withdrawn, obligating the Sales Tax Officer to comply. Consequently, the court quashed the order rejecting the appeals as incompetent and directed the restoration of the appeals for a hearing on merits, with costs awarded to the petitioner.

In conclusion, the court upheld the validity of the Amendment Act and ruled in favor of the petitioner's entitlement to the relief claimed in the appeals, emphasizing the binding nature of the mandamus for the tax refund until discharged.