1974 (4) TMI 93 - HC - VAT and Sales Tax

Summary

Issues:
1. Validity of the second notice issued under section 21 of the U.P. Sales Tax Act.
2. Jurisdiction of the Sales Tax Officer to issue the second notice.
3. Consideration of the second notice for determining the period of limitation.
4. Validity of the assessment order based on the information regarding the draft remitted to the assessee.
5. Adequacy of investigation into the points raised by the assessee.
6. Exercise of power of remand by the Appellate Assistant Commissioner (Judicial).

The High Court judgment addressed the issue of the validity of the second notice issued under section 21 of the U.P. Sales Tax Act. The Sales Tax Officer issued a notice on 7th September, 1960, which was returned unserved. The subsequent notice issued on 27th March, 1961, was challenged by the assessee. The Court held that the first notice was not validly served, and therefore, the second notice was deemed valid for the computation of the period of limitation under section 21(1) of the Act for completing the assessment proceedings. The assessment order passed on 24th March, 1962, was considered to be within the prescribed time limit.

Regarding the jurisdiction of the Sales Tax Officer to issue the second notice, the Court found that the first notice was not properly served as per the report of the process-server. The Sales Tax Officer's decision to issue a second notice was deemed valid, and it was considered for determining the period of limitation for the assessment proceedings. The Court held that the Sales Tax Officer had the jurisdiction to issue the second notice under section 21 of the Act.

The judgment also analyzed the validity of the assessment order based on the information regarding a draft remitted to the assessee. The Court noted that the Appellate Assistant Commissioner (Judicial) found the assessment order to be vague and lacking thorough investigation into the points raised by the assessee. The order was set aside, and the case was remanded for a fresh assessment to allow the assessee an opportunity to rebut the department's case and clarify the information in possession of the Sales Tax Officer.

The Court further examined the exercise of power of remand by the Appellate Assistant Commissioner (Judicial). It was observed that the remand order was based on the pleas raised by the assessee in appeal and was considered necessary for a more thorough investigation into the points raised. The Court deemed the exercise of power of remand to be sound and in accordance with the judicial discretion exercised by the Appellate Assistant Commissioner (Judicial).

In conclusion, the Court answered both questions in the affirmative, in favor of the department and against the assessee. The Commissioner of Sales Tax was awarded costs, assessed at Rs. 100. The reference was answered in the affirmative, affirming the decisions made in the case.