1978 (4) TMI 229 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Maintainability of the suit.
2. Jurisdiction of the civil court.
3. Validity of the assessment and recovery proceedings.
4. Compliance with statutory provisions under the Orissa Sales Tax Act and Orissa Public Demands Recovery Act.

Detailed Analysis:

1. Maintainability of the Suit:
The trial court held that the suit was not maintainable in its present form, citing the bar under section 22 of the Orissa Sales Tax Act and sections 42 and 45 of the Orissa Public Demands Recovery Act. The appellate court reversed this decision, stating that the suit was maintainable because the notice of demand had not been served as required under section 13(4) of the Act.

2. Jurisdiction of the Civil Court:
The trial court ruled that the civil court had no jurisdiction to try the suit due to section 22 of the Sales Tax Act, which bars any court from questioning assessments or orders made under the Act. However, the appellate court found that the civil court did have jurisdiction, as the statutory provisions had not been complied with, making the certificate proceeding invalid. This decision was supported by precedents from the Privy Council and the Supreme Court, which state that exclusion of civil court jurisdiction must be explicitly expressed or clearly implied, and even then, civil courts can examine cases where statutory provisions have not been followed or where the tribunal has not acted in conformity with fundamental judicial principles.

3. Validity of the Assessment and Recovery Proceedings:
The trial court found the assessment to be legal and valid, stating that the notice of demand and the copy of the order of assessment had been duly served on the plaintiff. However, the appellate court disagreed, finding that the notice of demand had not been served as required under section 13(4) of the Act. This non-service meant that the amount had not become recoverable as arrears of land revenue, and thus, the certificate proceeding was not tenable.

4. Compliance with Statutory Provisions:
The appellate court emphasized the importance of compliance with section 13(4) of the Act, which requires that the amount assessed must be paid within thirty days from the date of service of the notice issued by the Commissioner. Rule 32(1) of the Orissa Sales Tax Rules further mandates that a notice of demand in Form X must be served on the dealer. The appellate court found that this notice had not been served, making the amount not a "public demand" and the certificate officer's proceedings invalid. The court also cited various precedents to support the view that non-compliance with mandatory statutory provisions renders the proceedings void and subject to challenge in civil court.

Conclusion:
The appellate court's judgment was upheld, stating that the suit was maintainable, the civil court had jurisdiction, and the certificate proceeding was invalid due to non-compliance with statutory provisions. The appeal was dismissed with costs throughout.