1981 (4) TMI 256 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Whether the Board of Revenue was justified in rejecting the petitioner's application for revision as barred by limitation.
2. Whether the purported service of notice in form 26 on 11th May, 1970, was valid in law.

Detailed Analysis:

Issue 1: Justification for Rejection of Revision Application as Barred by Limitation

The dealer, Textile Machinery Corporation Ltd., challenged the rejection of its revision petition by the Board of Revenue, West Bengal, on the grounds of being time-barred. The dealer had filed a petition for condonation of delay, arguing that the delay was due to the closure of its registered office at 15, India Exchange Place, Calcutta, caused by an illegal strike and gherao by employees. The dealer claimed to have continued business from another location and had been paying regular taxes and complying with notices. The Additional Member, Board of Revenue, rejected the petition for condonation of delay, stating that the dealer should have inquired about the result of the case earlier and intimated the authorities about the closure of the registered office.

The court found that the Board of Revenue did not find any reasonable ground to condone the delay, as the dealer had waited for several months before making inquiries about the case's outcome. The court concluded that the rejection of the revision application as time-barred was not justified, given the circumstances that led to the delay.

Issue 2: Validity of Service of Notice in Form 26 on 11th May, 1970

The core issue was whether the service of notice in form 26 on 11th May, 1970, was valid. The dealer argued that the notice was improperly served by affixation at the closed registered office, despite the authorities being aware of the alternative business address at Belgharia. According to Rule 84 of the Bengal Sales Tax Rules, notice must be served personally, by messenger, or by registered post. If these methods fail, service by affixation is allowed only if the dealer is avoiding service, and reasons for such service must be recorded.

In this case, the notice sent by registered post was returned with the remark "left," and the authorities served the notice by affixation without attempting to find the dealer's other known address. The court found that the authorities did not fulfill the conditions required under Rule 84 before resorting to affixation. The Additional Member, Board of Revenue, accepted that the registered office was closed, yet did not address whether the dealer was avoiding service or if other methods were attempted.

The court concluded that the service of notice on 11th May, 1970, was not valid in law due to non-compliance with Rule 84. The court emphasized that the validity of service depends on whether the authorities adhered to the legal requirements, and in this case, they did not.

Conclusion

The court answered both questions in the negative and in favor of the dealer. The rejection of the revision application as time-barred was not justified, and the service of notice in form 26 on 11th May, 1970, was invalid. Consequently, the dealer's application for revision should not have been dismissed on the grounds of limitation, and the purported service of notice was not legally effective.