1984 (11) TMI 310 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Jurisdiction of the Sales Tax Officer, Enforcement Branch.
2. Validity of the transfer order dated 23rd January, 1961.
3. Application of principles of natural justice.
4. Validity of orders under section 52 of the Bombay Sales Tax Act, 1953.

Detailed Analysis:

1. Jurisdiction of the Sales Tax Officer, Enforcement Branch:
The respondent, M/s. Kalidas Mulji, challenged the jurisdiction of the Sales Tax Officer, Enforcement Branch, arguing that there was no valid transfer of assessment proceedings from the Sales Tax Officer, B-Ward, to the Sales Tax Officer, Enforcement Branch. The Tribunal accepted this contention and set aside the assessment order. The High Court examined the relevant provisions of the Bombay Sales Tax Act, 1953, particularly section 44(2), which allowed the Collector to transfer proceedings to any person to whom he had delegated his powers.

2. Validity of the Transfer Order Dated 23rd January, 1961:
The High Court scrutinized the transfer order dated 23rd January, 1961, issued by the Deputy Commissioner of Sales Tax, Bombay City Division (Enforcement). The respondent argued that section 52 of the Bombay Sales Tax Act, 1953, which was introduced to validate certain jurisdictional notifications, did not apply to future orders of assignment. However, the Court concluded that the language of section 52, which validated the jurisdiction conferred on officers in respect of dealers assigned to them "from time to time," was broad enough to cover future assignments as well.

3. Application of Principles of Natural Justice:
The Court considered whether the principles of natural justice required a hearing before passing the transfer order and whether the order should contain reasons. The Court noted that administrative orders with civil or adverse consequences generally require adherence to natural justice principles. However, in this case, the transfer was within the same city and did not cause any hardship or disadvantage to the respondent. The Court referenced the Supreme Court's decision in Pannalal Binjraj v. Union of India, which suggested that while it is prudent to follow natural justice principles, it is not mandatory for administrative transfers within the same city. The Court concluded that the transfer order did not necessitate a hearing or reasons, as it did not adversely affect the respondent.

4. Validity of Orders Under Section 52 of the Bombay Sales Tax Act, 1953:
The Court examined the scope of section 52, which validated the jurisdiction conferred on officers under specific notifications and the actions taken under that jurisdiction. The Court referred to the Division Bench decision in Commissioner of Sales Tax v. Hansraj Vishram Ravani, which clarified that section 52 precludes challenges to jurisdiction and assignment powers but does not preclude challenges based on non-compliance with natural justice principles for orders passed after section 52 came into effect. However, since the principles of natural justice were not applicable in this case, the transfer order was upheld.

Conclusion:
The High Court answered the referred question in the negative, ruling against the respondent-assessee. The order of assignment dated 23rd January, 1961, was deemed valid, and the principles of natural justice were not applicable. The respondent was allowed to challenge the order on other grounds before the Tribunal. The respondent was ordered to pay the costs of the reference to the applicant.