1972 (5) TMI 58 - HC - VAT and Sales Tax

Issues Involved:
1. Whether the Sales Tax Officer was required to issue notice to the petitioner before rectifying the recognition certificate.
2. Whether the recognition certificate should be effective from the date of application or the date of issue.
3. Whether sub-rule (5) of rule 25-A is ultra vires.
4. Whether the provisions regarding the issue of recognition certificate violate Article 14 of the Constitution.
5. Whether the delay in issuing the recognition certificate justifies a different interpretation of the relevant provisions.

Issue-wise Detailed Analysis:

1. Requirement of Notice Before Rectification:
The court examined whether the Sales Tax Officer was obligated to issue notice to the petitioner before rectifying the recognition certificate. The Sales Tax Officer rectified the certificate under section 22 of the U.P. Sales Tax Act, which allows rectification of mistakes apparent on the face of the record. However, the proviso to section 22 mandates that any rectification enhancing the assessment requires notice to the dealer. The court noted that the rectification increased the petitioner's purchase tax liability from 2% to 3%, thus enhancing the assessment. Therefore, the petitioner was entitled to notice and an opportunity to be heard before the rectification.

2. Effective Date of Recognition Certificate:
The court analyzed whether the recognition certificate should be effective from the date of application (26th March 1969) or the date of issue (9th April 1970). Rule 25-A(5) clearly states that the recognition certificate is to be effective from the date of its issue. The court held that the Sales Tax Officer's correction to make the certificate effective from the date of issue was in accordance with the law. The court emphasized that it would not exercise its jurisdiction under Article 226 to restore an illegal position.

3. Ultra Vires Nature of Rule 25-A(5):
The petitioner contended that sub-rule (5) of rule 25-A, which makes the recognition certificate effective from the date of its issue, is ultra vires. The court rejected this contention, affirming that the rule is consistent with the legislative intent and the statutory framework.

4. Violation of Article 14:
The petitioner argued that rule 25-A is discriminatory and violates Article 14 of the Constitution because it allows the Sales Tax Officer discretion in issuing recognition certificates, potentially leading to unequal treatment. The court found that the rule provides clear guidelines for issuing certificates and includes supervisory mechanisms to ensure prompt issuance. The court concluded that the provisions do not violate Article 14.

5. Delay in Issuing Recognition Certificate:
The petitioner claimed that the delay in issuing the recognition certificate should justify a different interpretation of the relevant provisions. The court noted that the delay was explained in the counter-affidavit and emphasized that even if there was a lapse on the part of the Sales Tax Officer, it would not justify misinterpreting clear statutory provisions. The petitioner should have sought remedy earlier if he believed there was undue delay.

Conclusion:
The court dismissed the petition, holding that the Sales Tax Officer's rectification of the recognition certificate to make it effective from the date of issue was legally correct. The court found no grounds to interfere under Article 226 of the Constitution, as the rectification restored the correct legal position. The provisions of rule 25-A and section 4-B were held to be valid and not in violation of Article 14. The petition was dismissed with costs.

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