1977 (9) TMI 100 - HC - VAT and Sales Tax

Summary

Issues:
1. Whether the petitioner-firm should be directed to avail of the statutory remedies of appeal and revision?
2. Whether the order passed by a quasi-judicial authority, not invested with the powers of appeal, should be allowed to stand?

Analysis:

The petitioner-firm, a registered dealer under the Punjab General Sales Tax Act, filed returns for the year 1975-76, claiming purchases of paddy by its commission agents were not liable for sales tax. The Assessing Authority rejected this, leading to an appeal before the Deputy Excise and Taxation Commissioner. The petitioner-firm's plea to entertain the appeal without tax payment was denied by the Deputy Commissioner, which was challenged in a writ petition. The High Court initially dismissed the petition, stating that statutory remedies of appeal and revision were available, and the matter was not fit for Article 226 discretion. The petitioner-firm then filed a Letters Patent Appeal (L.P.A.) against this decision, which was stayed by the High Court. However, during the confirmation of the stay order, it was revealed that the main appeal had been dismissed by the Deputy Commissioner. The Bench dismissed the L.P.A. against the interim orders, stating that post-main cause disposal, interlocutory matters cannot be challenged under Article 226.

The first issue revolves around whether the petitioner-firm should be directed to pursue statutory remedies of appeal and revision. The High Court examined the constitutional provision of Article 265, emphasizing that taxes must be levied under lawful authority to avoid unreasonable restrictions on property rights. It was held that if the appellate authority lacked jurisdiction, the petitioner's right to property was violated, allowing invocation of Article 226 jurisdiction. The Court highlighted the importance of fundamental rights under Part III of the Constitution in determining the availability of alternative remedies.

Regarding the second issue, the Court delved into the statutory provisions of the Punjab General Sales Tax Act. It was established that for an appellate authority to hear an appeal against an assessment order, it must be appointed as an Excise and Taxation Commissioner and invested with appellate jurisdiction by the State Government. Any decision by an authority lacking appellate jurisdiction is considered null and void. Citing precedent, the Court emphasized the necessity of proper appointment before exercising quasi-judicial functions. The judgment in a similar case confirmed that the Deputy Commissioner obtained appellate powers at a later date, rendering his decisions prior to that date invalid. Consequently, the High Court allowed the petition, setting aside the Deputy Commissioner's orders and remanding the case for a fresh decision in accordance with the law.

In conclusion, the High Court allowed the petition, emphasizing the importance of proper jurisdiction for quasi-judicial authorities and upholding the petitioner-firm's right to a statutory appeal process. The case was remanded for a fresh decision, with costs awarded to the petitioner-firm.