1981 (8) TMI 214 - HC - VAT and Sales Tax

Summary

Issues:
1. Challenge to demand for payment of sales tax for assessment year 1974-75.
2. Interpretation of provisions of Burn Company and Indian Standard Wagon Company (Taking Over of Management) Act, 1973 and Act 97 of 1976.
3. Jurisdiction of the third respondent to demand sales tax from petitioner-company.
4. Applicability of section 5 and section 25 of Act 97 of 1976.
5. Validity of two assessment orders for the same assessment year.
6. Interpretation of section 18 of Act 97 of 1976 regarding priorities in disbursement of amounts collected.

Detailed Analysis:
The writ petition challenges the demand for sales tax payment for the assessment year 1974-75, contending that liabilities prior to the appointed day under the Burn Company and Indian Standard Wagon Company Act, 1973, became the responsibility of Burn & Co. Ltd., not the petitioner-company. Despite objections raised, the third respondent issued an assessment order and a demand notice, leading to the filing of the petition. The counter-affidavit argues that the petitioner-company, as the successor, is liable for the sales tax under section 18 of Act 97 of 1976, emphasizing the company's past tax payments and the issuance of pre-assessment notices. The petitioner argues that section 5 of Act 97 of 1976 limits liabilities to transactions post the appointed day, not before. The Government Pleader counters that past tax payments by the petitioner in prior years do not negate liability for the current assessment year.

The petitioner relies on the precedence set by the Western Coal Fields Ltd. case, asserting that the provisions of Act 97 of 1976 override the Sales Tax Act for liabilities pre-appointment day. The petitioner contests the legality of two assessment orders for the same year against Burn & Co. and the petitioner-company, citing the absence of provisions for parallel assessments in the Sales Tax Act. Additionally, the petitioner challenges the respondents' reliance on section 18 for disbursement priorities, arguing that it does not conflict with section 5(1) and cannot be used to collect sales tax from the Central Government's undertaking. The judgment holds that past liabilities cannot be enforced against the Central Government or the undertaking post the appointed day, making the rule nisi absolute and ruling no costs to be awarded.