1976 (7) TMI 147 - HC - VAT and Sales Tax

Summary

Issues:
Appeal against judgment and decree of Civil Judge regarding sales tax assessment for the years 1958-59 and 1959-60. Jurisdiction of civil court to examine compliance with the provisions of the U.P. Sales Tax Act, 1948 and fundamental principles of judicial procedure.

Analysis:
The appeal before the High Court of Allahabad stemmed from a judgment and decree of the Civil Judge, Aligarh, which overturned the decision of the Munsif at Aligarh and ruled in favor of the plaintiff. The plaintiff, who had been assessed for sales tax for the years 1958-59 and 1959-60, contended that he was merely a moulder and not engaged in selling goods. Despite the plaintiff's assertion and lack of inquiry from M/s. Dass Electrical, the Sales Tax Officer assessed him based on undisclosed information. The plaintiff's appeals against the assessment were unsuccessful, leading to the filing of a suit seeking an injunction against the tax recovery.

The Munsif initially dismissed the suit citing section 17 of the U.P. Sales Tax Act, 1948, which the Civil Judge later overruled. The Civil Judge held that the civil court had jurisdiction to review compliance with the Act and fundamental judicial principles. Citing the Supreme Court's decision in Dhulabhai v. State of Madhya Pradesh, the High Court emphasized that the exclusion of civil court jurisdiction does not apply when statutory procedures are not followed or fundamental judicial principles are violated. The failure to examine M/s. Dass Electrical despite the plaintiff's denial of sales amounted to a breach of judicial procedure, justifying the Civil Judge's decision to set aside the assessment orders.

The High Court upheld the Civil Judge's ruling, emphasizing the importance of adherence to fundamental judicial principles in tax assessments. The appeal by the State of U.P. and the Sales Tax Officer was dismissed, with no costs awarded. The judgment highlighted the significance of proper procedure and compliance with statutory requirements in tax assessments, affirming the civil court's jurisdiction to intervene in cases of procedural violations by tax authorities.