1983 (4) TMI 238 - HC - VAT and Sales Tax

Summary

Issues:
1. Challenge to a notice issued under section 12 of the Rajasthan Sales Tax Act, 1954.
2. Interpretation of the term "packing material" under the notification dated 1st July, 1975.
3. Jurisdiction of the Commercial Taxes Officer to issue notices under section 12 of the Act.
4. Availability of alternative and efficacious remedies under the Act.

Detailed Analysis:

1. The petitioner, a partnership firm engaged in manufacturing cartons and packing materials, challenged a notice issued under section 12 of the Rajasthan Sales Tax Act, 1954. The petitioner contended that the assessment order for the relevant period had been finalized and not challenged, thus the notice was illegal and without jurisdiction. The petitioner argued that section 12 could only be invoked for escaped assessments or under-assessment, which was not the case here. The petitioner relied on the decision in Mansatta Industries Pvt. Ltd. v. State of Gujarat and Rashtra Deep Laboratory v. Commissioner of Sales Tax, U.P. to support its claim that its products fell under the category of packing materials listed in the notification dated 1st July, 1975, attracting a 4% tax rate.

2. The dispute centered around the interpretation of the term "packing material" under the notification. The petitioner contended that the expression should be construed broadly to include various packing materials used in cartons, such as craft paper, pigeon partition sets, and corrugated rolls. On the other hand, the department argued that the concessional rate of tax applied only to items explicitly listed in the notification, and the petitioner should be taxed at 7% for certain materials. The department relied on the Supreme Court decision in State of Tamil Nadu v. Pyare Lal Malhotra to support its interpretation that the list was exhaustive.

3. The jurisdiction of the Commercial Taxes Officer to issue notices under section 12 was also contested. The department argued that the officer had the authority to issue notices for any reason, as per the wide language of the statute. The petitioner, however, claimed that the notice was issued without proper grounds, as the assessment order had already been finalized and disclosed all relevant information. The petitioner's appeal against a similar reassessment for a previous year was also highlighted to show the ongoing dispute.

4. The High Court dismissed the writ petition, emphasizing the availability of alternative remedies under the Act. It held that the petitioner had the opportunity to raise all objections before the assessing authority and pursue appeals and revisions as provided by law. The Court cited a previous Division Bench decision to support its stance that the petitioner should exhaust the statutory remedies before approaching the Court. The judgment underscored that the petitioner's appeal against a previous order indicated the availability of an efficacious remedy, thus rejecting the need for judicial intervention.

In conclusion, the High Court upheld the jurisdiction of the Commercial Taxes Officer to issue notices under section 12, emphasized the need to exhaust statutory remedies before resorting to writ petitions, and highlighted the importance of interpreting tax notifications strictly.