1973 (11) TMI 75 - HC - VAT and Sales Tax

Issues Involved:
1. Whether the assessment order for the year 1952-53 was barred by limitation.
2. Whether the Judge (Revisions), Sales Tax, qualifies as a "civil or other competent court" under the explanation to section 21(2) of the U.P. Sales Tax Act.

Detailed Analysis:

1. Whether the assessment order for the year 1952-53 was barred by limitation:
The assessee, a partnership firm dealing in bullion and ornaments, was assessed for the year 1952-53 by the Sales Tax Officer, Varanasi, on 23rd June, 1962. According to section 21(2) of the U.P. Sales Tax Act, no assessment order could be made after four years from the end of the relevant year. However, the explanation to section 21(2) allowed for the exclusion of any period during which the assessment proceedings were stayed by a court order. The assessment proceedings were stayed multiple times: once by the High Court from 22nd July, 1954, to 30th April, 1959, and again by the Judge (Revisions), Sales Tax, from 16th December, 1960, to 23rd January, 1961, with the order vacating the stay being communicated on 7th May, 1961. The appellate authority and the additional revising authority held that these periods should be excluded, making the assessment on 23rd June, 1962, within the limitation period.

2. Whether the Judge (Revisions), Sales Tax, qualifies as a "civil or other competent court" under the explanation to section 21(2) of the U.P. Sales Tax Act:
The crux of the issue hinges on whether the Judge (Revisions), Sales Tax, can be considered a "civil or other competent court" within the meaning of the explanation to section 21(2). The assessee argued that the Judge (Revisions) was not a civil or competent court and thus, the period during which the proceedings were stayed by the Judge (Revisions) should not be excluded. The standing counsel for the department contended that the Judge (Revisions) should be considered a court because the Sales Tax Act and the Rules framed thereunder endowed the Judge (Revisions) with judicial powers similar to those of a court.

The court analyzed the nature of the Judge (Revisions) under the U.P. Sales Tax Act, noting that the Act and the Rules provided for the appointment of revising authorities from persons qualified to be High Court judges, and these authorities had to decide cases in a judicial manner. Despite these judicial trappings, the court concluded that the Judge (Revisions) did not perform judicial functions of the State but rather acted as an instrumentality of the State supervising the assessment and collection of taxes. The court cited various precedents, including Bharat Bank v. Employees of Bharat Bank and Virendra Kumar v. State of Punjab, to distinguish between courts and quasi-judicial tribunals.

The court held that merely because the Judge (Revisions) performed his duties in a judicial manner did not make him a court. The court also noted that the Legislature had deliberately used the term "court" in section 21(2) and "authority" elsewhere in the Act, indicating a clear distinction. Therefore, the period during which the proceedings were stayed by the Judge (Revisions) could not be excluded in computing the limitation period.

Conclusion:
The court concluded that the assessment order for the year 1952-53 was barred by limitation. The period during which the proceedings were stayed by the Judge (Revisions), Sales Tax, could not be excluded in computing the period of limitation because the Judge (Revisions) did not qualify as a "civil or other competent court" under the explanation to section 21(2) of the U.P. Sales Tax Act. The assessment made on 23rd June, 1962, was therefore barred by time. The question referred to the court was answered in the affirmative and in favor of the assessee, with costs assessed at Rs. 100.

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