1980 (1) TMI 190 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Continuation of assessee's liability under section 4(2) of the Orissa Sales Tax Act post-amendment.
2. Justification of the Tribunal's decision on the assessee's liability for specific quarters.

Issue-wise Detailed Analysis:

Issue 1: Continuation of Assessee's Liability Under Section 4(2) Post-Amendment

The primary question was whether the assessee's liability determined under section 4(2) of the Orissa Sales Tax Act, prior to its amendment effective from 1st July 1969, would continue for three consecutive years. The court noted that the assessee, dealing in grocery and stationery articles, was unregistered for the period between 8th June 1968 and 31st March 1970 but got registered on 25th February 1970.

The Sales Tax Officer assessed the liability starting from the quarter ending 31st March 1969, while the Assistant Commissioner adjusted the liability commencement to 1st January 1969. However, the Assistant Commissioner annulled assessments for the quarters ending 30th September 1969 and 31st December 1969, citing that the liability did not survive beyond 30th June 1969 due to the amending Act of 1968.

The Tribunal further adjusted the liability, stating that the assessee's liability would ensue from 1st March 1969, and determined the Gross Turnover (G.T.O.) accordingly. The court referred to Section 16 of the amending Act, which clarified that the liability for periods prior to the amendment date would not be affected by the amendment. The court concluded that the liability under section 4(3) continued for three consecutive years even if the turnover fell short of Rs. 25,000, thus the assessments for subsequent periods were valid.

Conclusion: The assessee's liability determined under section 4(2) of the Act prior to the amendment continued for three consecutive years as provided under section 4(3) of the Act.

Issue 2: Justification of the Tribunal's Decision on Assessee's Liability for Specific Quarters

The second question addressed whether the Tribunal was justified in holding that the assessee, whose liability to pay tax accrued from 1st March 1969 and who registered on 25th February 1970, was not liable for the quarters ending 30th September 1969 and 31st December 1969.

The Tribunal had annulled the assessments for these quarters, arguing that the turnover did not exceed Rs. 25,000 during the assessment year 1968-69. The court, however, disagreed with this conclusion, emphasizing that the liability for periods up to 30th June 1969 had to be computed based on the original provisions of the Act, not the amended ones. The court reiterated that under section 4(3), a dealer who became liable to pay tax would continue to be liable until the expiry of three consecutive years during which the turnover did not exceed Rs. 25,000.

Conclusion: The Tribunal was not justified in holding that the assessee was not liable to pay tax for the quarters ending 30th September 1969 and 31st December 1969.

Final Judgment:
The court answered both questions in favor of the revenue, holding that the assessee's liability continued post-amendment for three consecutive years and that the Tribunal was incorrect in annulling the tax liability for the specified quarters. No order was made regarding the costs.