1981 (7) TMI 231 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Legality of attachment and sale of tenancy rights for recovery of sales tax arrears.
2. Authority of the Commercial Taxes Officer to conduct the sale.
3. Competence of the Assistant Commercial Taxes Officer to conduct the sale.
4. Whether the sale conducted by an unauthorized officer is a nullity or an irregularity.
5. Substantial injury or failure of justice due to the sale.

Detailed Analysis:

1. Legality of Attachment and Sale of Tenancy Rights for Recovery of Sales Tax Arrears:
The petitioner challenged the attachment and sale of tenancy rights in agricultural land to recover sales tax arrears. The petitioner argued that Section 37 of the Rajasthan Tenancy Act, 1955, prohibits such actions. However, the court clarified that Section 37 only bars the attachment and sale of tenancy rights by a civil court, not by authorities recovering arrears of sales tax as arrears of land revenue under Section 11(3) of the Rajasthan Sales Tax Act. Therefore, the attachment and sale by the Commercial Taxes Officer were not in derogation of Section 37 of the Tenancy Act.

2. Authority of the Commercial Taxes Officer to Conduct the Sale:
The petitioner contended that only the Collector could proceed to realize arrears of land revenue under the Land Revenue Act, and the Commercial Taxes Officer lacked such authority. The court referred to Section 260(1)(b) of the Act, which allows the State Government to delegate the duties and powers of the Collector to other officers. By a notification, the powers of the Collector were delegated to all Commercial Taxes Officers, authorizing them to perform duties related to the sale of rights in agricultural land for arrears of sales tax. Thus, the Commercial Taxes Officer was fully authorized to conduct the sale.

3. Competence of the Assistant Commercial Taxes Officer to Conduct the Sale:
The petitioner argued that the sale should have been conducted by the Collector, Assistant Collector, or Tehsildar, as specified in Section 239 of the Act, and not by the Assistant Commercial Taxes Officer. The court noted that the proclamation for sale was issued by the Commercial Taxes Officer but specified that the sale would be conducted by the Assistant Commercial Taxes Officer. Since Section 239 does not authorize the Assistant Commercial Taxes Officer to conduct the sale, the court held that the sale conducted by the Assistant Commercial Taxes Officer was without jurisdiction and a nullity.

4. Whether the Sale Conducted by an Unauthorized Officer is a Nullity or an Irregularity:
The court discussed the distinction between a nullity and an irregularity, citing the Supreme Court's approval of the principle that a nullity is a proceeding taken without any foundation or authority, whereas an irregularity is a deviation from a rule of law that does not affect the proceeding's foundation. The court concluded that the sale conducted by an unauthorized officer is a nullity, as it was without jurisdiction and fundamentally defective.

5. Substantial Injury or Failure of Justice Due to the Sale:
The State argued that no substantial injury was caused to the petitioner and that the petitioner should have raised objections within thirty days under Section 247 of the Act. However, the court held that since the sale was a nullity, it resulted in manifest injustice to the petitioner. The court noted that conducting the sale in accordance with the law could have fetched a higher bid, thereby better protecting the petitioner's interests. The court rejected the argument that no substantial injury was caused, emphasizing that the illegal sale deprived the petitioner of his rights in the land contrary to the due process of law.

Conclusion:
The writ petition was allowed, and the proceedings for the sale of the petitioner's rights in agricultural land were quashed. The Commercial Taxes Officer was granted liberty to resell the petitioner's rights in accordance with the law for the realization of outstanding sales tax dues.