1978 (3) TMI 203 - HC - VAT and Sales Tax

Summary

Issues:
1. Whether the ex parte assessment for the year 1964-65 was barred by limitation.
2. Whether service of notice is a condition precedent for an assessment under section 7(3) of the U.P. Sales Tax Act.
3. Justification of upholding the annulment of the assessment for the year 1964-65.

Analysis:
The High Court of Allahabad addressed three questions referred by the Additional Judge (Revisions), Sales Tax. Firstly, regarding the limitation of the ex parte assessment for the year 1964-65, it was contended that the assessment order was passed on 26th March 1969, within the four-year limitation period from the end of the assessment year. The Court clarified that the service of notice to the assessee after the assessment order did not affect the assessment's validity under section 21(2) of the Act. The Court held that the assessment was not time-barred, overturning the decision of the revising authority.

Secondly, the Court discussed whether the service of notice is a prerequisite for assessment under section 7(3) of the Act. The Court highlighted that the first proviso under section 21(2) extending the limitation period applies only to cases under section 21(1) and not to assessments under other sections like 7(3). As this question was not raised before the Judge (Revisions), Sales Tax, the Court declined to answer it, emphasizing that the Judge (Revisions) erred in considering the issue due to its irrelevance to the case.

Lastly, the Court addressed the justification of upholding the annulment of the assessment for the year 1964-65. The Court concluded that since the assessment was not time-barred and the service of notice issue was not relevant, the revising authority was not justified in annulling the assessment. Consequently, the Court answered the first question in the negative, in favor of the department, and declined to answer the second question. The third question was answered by stating that the Judge (Revisions) was not justified in annulling the assessment, ruling in favor of the department. The Court awarded costs to the department, with counsel's fee assessed at Rs. 200.