1979 (2) TMI 176 - HC - VAT and Sales Tax

Summary

Issues Involved:

1. Validity of the assessment order dated 16th August 1962.
2. Scope of the assessing authority's jurisdiction upon remand.
3. Applicability of the limitation period under section 21 of the U.P. Sales Tax Act.
4. Powers of the appellate and revising authorities under the U.P. Sales Tax Act.

Issue-wise Detailed Analysis:

1. Validity of the assessment order dated 16th August 1962:

The dealer, Sri Harbilas, questioned the assessment order dated 16th August 1962, arguing that the assessing authority could not consider fresh material post the remand order dated 25th November 1958. The appellate authority rejected this submission, stating that the entire case became wide open upon remand, allowing the Sales Tax Officer to consider new material. The revising authority upheld this view, relying on a Division Bench decision in D.S. Bist v. Commissioner, Sales Tax, which allowed the consideration of new material upon remand.

2. Scope of the assessing authority's jurisdiction upon remand:

The main legal question was whether the assessing authority could examine the case afresh and assess tax on enhanced turnover during reassessment proceedings after remand. The court analyzed the provisions of section 7, 9, 10, and 21 of the U.P. Sales Tax Act. It concluded that when an appellate authority sets aside an assessment and remands the case, the assessing authority has the same powers as originally held under section 7, subject to any directions for further enquiry. However, the revising authority under section 10 has broader powers and can limit the scope of reassessment.

3. Applicability of the limitation period under section 21 of the U.P. Sales Tax Act:

The dealer argued that the limitation period prescribed under section 21(2) should apply to reassessment proceedings based on new material. The court disagreed, stating that the second proviso to section 21(2) exempts assessments made in consequence of remand orders from the limitation period. The court emphasized that the fresh assessment is a continuation of the original proceedings and not a new assessment, thereby not attracting the limitation period under section 21(2).

4. Powers of the appellate and revising authorities under the U.P. Sales Tax Act:

The court examined the powers of the appellate authority under section 9(3) and the revising authority under section 10. It noted that the appellate authority could set aside an assessment and direct a fresh assessment after further enquiry but could not limit the scope of reassessment. In contrast, the revising authority could restrict the scope of reassessment through specific directions. The court highlighted that the appellate authority's directions pertain only to the enquiry process, not the extent of reassessment.

Conclusion:

The court concluded that upon remand by an appellate authority, the assessing authority retains its original powers under section 7, subject to any specific directions for further enquiry. However, if remanded by a revising authority, the assessing authority's jurisdiction could be limited by the revising authority's specific directions. The reference was answered accordingly, affirming the broader jurisdiction of the assessing authority upon remand unless explicitly restricted by the revising authority.