1977 (2) TMI 117 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Tax rate applicability on cups, saucers, dishes, etc.
2. Validity of service of notice under section 15 of the Bombay Sales Tax Act, 1953, on Mr. Merchant.
3. Validity of reassessment proceedings based on notice served on Mr. Merchant.
4. Jurisdiction of the Sales Tax Officer to reassess after an appellate order.

Detailed Analysis:

Issue 1: Tax Rate Applicability on Cups, Saucers, Dishes, etc.
The applicants contended that cups, saucers, dishes, etc., were liable to general tax at the rate of one-half of an anna in the rupee under section 6 of the Bombay Sales Tax Act, 1946, and not chargeable to special tax at the rate of one anna under entry 17 of Schedule I to the said Act. This issue was not addressed due to the resolution of other issues.

Issue 2: Validity of Service of Notice Under Section 15 on Mr. Merchant
The applicants argued that the notice under section 15 of the 1953 Act served on Mr. Merchant, the manager, was not a valid service in law, and hence, the reassessment proceedings were invalid. The court examined the relevant statutory provisions, including section 15 of the 1953 Act and rule 47 of the Bombay Sales Tax (Procedure) Rules, 1954. It was determined that service must be made on the dealer or an authorized agent as defined by rule 2(i) of the said Rules. The court found that Mr. Merchant was not an agent as defined by the Rules, and thus, the service was invalid.

Issue 3: Validity of Reassessment Proceedings Based on Notice Served on Mr. Merchant
The court held that the reassessment authority would acquire jurisdiction only if a valid notice under section 15 was issued and duly served upon the assessee. Since the notice was not validly served, the reassessment proceedings were invalid. The court emphasized that both a defect in the notice and wrong service of the notice would invalidate the notice and confer no jurisdiction upon the reassessing authority.

Issue 4: Jurisdiction of the Sales Tax Officer to Reassess After an Appellate Order
The applicants contended that since the first order of reassessment was set aside in appeal, the Sales Tax Officer had no jurisdiction to initiate fresh reassessment proceedings for the same period. The court did not address this issue due to the resolution of issues 2 and 3, which rendered the reassessment proceedings invalid.

Conclusion:
The court answered questions 2 and 3 in the negative, determining that the service of the notice on Mr. Merchant was not valid and that the reassessment proceedings were invalid. Consequently, it found it unnecessary to determine or answer questions 1 and 4. The respondent was ordered to pay the applicants' costs of the reference, fixed at Rs. 300.