1982 (2) TMI 284 - HC - VAT and Sales Tax

Summary

Issues:
1. Jurisdiction of the Tribunal based on the amount of tax in dispute.
2. Authority of the Tribunal to decide on merits when the assessing authority directed further inquiry.

Analysis:
The judgment by the Allahabad High Court pertains to a revision under section 11(1) of the U.P. Sales Tax Act filed by the Commissioner of Sales Tax against an order of the Sales Tax Tribunal. The Tribunal had set aside an order remanding a case for further inquiry to the assessing authority. The dealer contended that no business of manufacturing and selling bricks was conducted during the relevant year, leading to an ex parte assessment by the assessing authority. The Assistant Commissioner directed additional investigation to ascertain whether the dealer had indeed manufactured bricks. However, the Tribunal, comprising a single member, decided that the dealer was not taxable, which was challenged by the Commissioner based on the Tribunal's lack of jurisdiction due to the tax amount in dispute exceeding Rs. 5,000.

The first issue addressed by the High Court was the Tribunal's jurisdiction based on the tax amount in dispute. Section 10(10)(a) of the Act mandates that cases with tax amounts exceeding Rs. 5,000 be heard by a Bench of two members. In this instance, the tax liability against the dealer was Rs. 11,500, necessitating consideration by a two-member Bench. The Court upheld the Commissioner's objection on this ground, indicating a lack of jurisdiction by the single-member Tribunal in deciding the matter.

The second issue involved the Tribunal's authority to determine the case on its merits when the Assistant Commissioner had directed further inquiry without expressing a definitive opinion. The Commissioner argued that the Tribunal overstepped its bounds by making a final determination instead of relying on the incomplete investigation directed by the Assistant Commissioner. Additionally, it was contended that the dealer did not seek a merit-based decision, evident from the minimal court fee paid. Although the Court refrained from expressing a view on these contentions, it set aside the Tribunal's order due to jurisdictional inadequacy, emphasizing that the matter should be adjudicated in accordance with the law.

In conclusion, the High Court allowed the revision, overturning the Tribunal's decision and directing the case to be heard and adjudicated with the appropriate jurisdiction. No costs were awarded in this matter.