1973 (8) TMI 142 - HC - VAT and Sales Tax

Summary

Issues:
1. Validity of service of notice under section 21 of the U.P. Sales Tax Act.
2. Whether the assessment order can be deemed to be under section 7(3) of the Act.
3. Validity of the remand order passed by the Assistant Commissioner.

Analysis:

Issue 1: Validity of service of notice under section 21
The court deliberated on the applicability of section 21 of the Act and its relationship with section 7(3) in cases where the assessee fails to file a return or pay tax during the assessment year. The court referred to previous decisions and highlighted that both sections 21 and 7(3) could apply simultaneously, with the choice left to the Sales Tax Officer based on the circumstances of each case. In this instance, the assessee had not filed a return or paid tax for the assessment year in question, leading the Sales Tax Officer to proceed under section 21. The court emphasized that a notice under section 21 is jurisdictional and must be validly served within four years for a valid assessment. The court reframed the first question regarding the service of the notice under section 21 and answered it affirmatively, emphasizing the materiality of the notice's service.

Issue 2: Assessment order under section 7(3)
The court clarified that the assessment order in this case could not be deemed to be under section 7(3) as it was passed in accordance with the notice under section 21. Therefore, the court answered the second question in the negative, highlighting the significance of the choice made by the Sales Tax Officer to proceed under section 21.

Issue 3: Validity of the remand order
The court deemed it unnecessary to answer the third question regarding the validity of the remand order, as its determination would rely on the validity of the service of the notice under section 21. Consequently, the court did not provide an answer to this question. The reference was answered accordingly, with the assessee being awarded costs.

In conclusion, the judgment emphasized the importance of the valid service of a notice under section 21 for a proper assessment under the U.P. Sales Tax Act. It clarified the interplay between sections 21 and 7(3) and highlighted the jurisdictional nature of the notice under section 21 in initiating assessments.