1976 (2) TMI 162 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Validity of the notice under section 15 of the Bombay Sales Tax Act, 1953, dated 29th March, 1956.
2. Whether the defect in the notice was cured by the letter dated 18th April, 1956.
3. Legality of the proceedings initiated by the Sales Tax Officer based on the notice.

Detailed Analysis:

1. Validity of the Notice under Section 15
The primary issue was whether the notice dated 29th March, 1956, was valid despite fixing the hearing date on 19th April, 1956, a public holiday. The court examined the relevant provisions and found that the notice was defective. The notice required the respondents to appear on a public holiday, which contravened the resolution dated 29th November, 1949, mandating closure of government offices on such days. The court held that the Sales Tax Officer was not entitled to require the assessees to appear on a public holiday, rendering the notice invalid. The court emphasized that for a notice under section 15 to be valid, it must specify a date that allows the assessee to comply meaningfully, and a date on a public holiday does not meet this requirement.

2. Cure of the Defect by the Letter Dated 18th April, 1956
The court addressed whether the defect in the notice was remedied by the subsequent letter dated 18th April, 1956, which rescheduled the hearing to 24th April, 1956. The court held that the defect could not be cured by this letter, especially since it was issued after the statutory period of five years had expired. The court cited the principle that jurisdictional defects cannot be waived or cured by subsequent actions, referencing the decision in Ramsukh Motilal's case, which established that compliance with an invalid notice does not validate the proceedings initiated under it.

3. Legality of the Proceedings Initiated by the Sales Tax Officer
The court concluded that the reassessment proceedings initiated by the Sales Tax Officer based on the defective notice were invalid. The Tribunal's decision to set aside the assessment order was upheld. The court reiterated that a valid notice under section 15 is a condition precedent for the Sales Tax Officer to assume jurisdiction, and the failure to comply with this requirement rendered the proceedings void.

Conclusion:
The court answered the referred questions as follows:
1. The Tribunal was justified in holding the notice defective and bad in law.
2. The defect in the notice was not cured by the letter dated 18th April, 1956.
3. The Tribunal was justified in holding the proceedings initiated by the Sales Tax Officer as bad in law.

The applicant was ordered to pay the costs of the reference, fixed at Rs. 250.

Reference Answered Accordingly.