1978 (1) TMI 160 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Exemption from sales tax on woollen felts.
2. Jurisdiction of the assessing authority to reopen the assessment.
3. Interpretation of Section 12 of the Rajasthan Sales Tax Act.
4. Availability of alternative remedies under the Rajasthan Sales Tax Act.

Detailed Analysis:

1. Exemption from Sales Tax on Woollen Felts:
The petitioner, M/s. Rajasthan Felts Manufacturing Company, claimed exemption from sales tax on the sale of woollen felts for the assessment year 1968-69. The Sales Tax Officer initially allowed this exemption, treating woollen felts as woollen fabric subject to additional excise duty. However, subsequent judgments, including a Division Bench decision in the case of Messrs. S. Zoraster and Company, held that woollen felts are not woollen fabrics and thus not liable to additional excise duty. Consequently, the exemption granted to the petitioner was questioned.

2. Jurisdiction of the Assessing Authority to Reopen the Assessment:
The petitioner argued that the assessing authority had no jurisdiction to reopen the assessment under Section 12 of the Rajasthan Sales Tax Act merely due to a change in opinion following the High Court's ruling. The petitioner contended that all material facts were disclosed during the initial assessment, and the exemption was granted after due consideration. The court noted that the assessing authority's jurisdiction to reopen the assessment is not confined to mere change of opinion but can be based on new information or legal interpretations, as established by the Supreme Court in Union of India v. Gujarat Woollen Felt Mills.

3. Interpretation of Section 12 of the Rajasthan Sales Tax Act:
The court analyzed Section 12 of the Rajasthan Sales Tax Act, which allows the assessing authority to reopen assessments if "for any reason" the business of a dealer has escaped assessment. The phrase "for any reason" was interpreted broadly, allowing reassessment based on new legal interpretations or factual information. The court referenced multiple cases, including Maharaj Kumar Kamal Singh v. Commissioner of Income-tax and Assistant Controller of Estate Duty, Hyderabad v. Mir Osman Ali Khan Bahadur, to support the view that the term "information" includes judicial decisions and legal interpretations.

4. Availability of Alternative Remedies under the Rajasthan Sales Tax Act:
The court emphasized that the Rajasthan Sales Tax Act provides a complete machinery for addressing grievances, including appeals, revisions, and rectifications. The petitioner was advised to utilize these statutory remedies instead of seeking redress through a writ petition under Article 226 of the Constitution. The court cited several precedents, including Sales Tax Officer, Jodhpur v. Shiv Ratan G. Mohatta and Delhi Cloth and General Mills Co. Ltd. v. R. R. Gupta, to underline that the High Court's writ jurisdiction should not be invoked when adequate alternative remedies are available.

Conclusion:
The writ petition was dismissed on the grounds that the assessing authority had jurisdiction to reopen the assessment based on new legal interpretations, and the petitioner had alternative remedies under the Rajasthan Sales Tax Act. The court reiterated that mere change of opinion is insufficient to reopen an assessment, but new information or legal rulings can justify such actions. The petition was also dismissed due to the availability of alternative statutory remedies, which the petitioner had not exhausted.