1985 (10) TMI 267 - HC - VAT and Sales Tax

Issues Involved:
1. Justification of the Board of Revenue in remanding the case for reassessment under section 9(3)(b) of the Rajasthan Sales Tax Act while dealing with rectification matter.
2. Justification of the Board of Revenue in remanding the case for reassessment when the non-applicant assessee had not preferred any appeal or revision against the assessment order dated September 16, 1966.

Detailed Analysis:

Issue 1: Justification of the Board of Revenue in Remanding the Case for Reassessment under Section 9(3)(b) of the Rajasthan Sales Tax Act while Dealing with Rectification Matter

The Board of Revenue for Rajasthan, Ajmer, referred the question of whether it was justified in remanding the cases for reassessment under section 9(3)(b) of the Rajasthan Sales Tax Act while dealing with a rectification matter. The assessment of the firm was made on September 16, 1966, and a demand for Rs. 24,739.58 was created. Gulab Chand Malpani, one of the partners, objected to the recovery proceedings on the grounds that the firm had been dissolved and the assessment was a nullity. The Commercial Taxes Officer (C.T.O.) overruled the objections, stating that the assessment order could not be challenged as no appeal or revision had been filed.

Gulab Chand Malpani filed a revision, which led to an interim stay order that was later vacated. A special appeal was filed and rejected, leading to a rectification application under section 17 of the Act. The Division Bench of the Board accepted the application, set aside the previous order, and restored the special appeal for regular hearing. The Division Bench, upon hearing the special appeal, set aside the single Member's order and directed an enquiry to determine if the firm had been dissolved, and if so, to proceed under section 9(3)(b) of the Act.

The Court found that the Division Bench of the Board exceeded its jurisdiction by directing the assessing authority to make an enquiry regarding the dissolution of the firm and to proceed under section 9(3)(b) of the Act. The special appeal was meant to address the interim stay order, not to reassess the original assessment order, which had not been appealed or revised.

Issue 2: Justification of the Board of Revenue in Remanding the Case for Reassessment when the Non-applicant Assessee had not Preferred any Appeal or Revision against the Assessment Order Dated September 16, 1966

The second part of the question was whether the Board was justified in remanding the case for reassessment when the non-applicant assessee had not filed any appeal or revision against the assessment order dated September 16, 1966. The Court noted that the assessment order was not challenged through appeal or revision. When recovery proceedings were initiated, objections were filed but overruled by the C.T.O. A revision was filed, leading to a stay order that was later vacated. The special appeal against the vacating of the stay order was also rejected, but a rectification application led to the restoration of the special appeal.

The Court held that the Division Bench of the Board, in the special appeal, could not direct the assessing authority to make an enquiry regarding the dissolution of the firm or to proceed under section 9(3)(b) of the Act, as this amounted to setting aside the assessment order dated September 16, 1966, which had become final due to the absence of any appeal or revision. The Board's action was beyond its jurisdiction, as it was not the subject-matter of the special appeal, which was limited to the interim stay order.

The Court referenced relevant cases, including State of Orissa v. Lakhoo Varjang, Commercial Taxes Officer v. Chhaganmal Bastimal of Beawar, Central Camera Co. (P.) Ltd. v. Government of Madras, Periannan Chettiar v. Commissioner of Income-tax, and Hukum Chand Mills Ltd. v. Commissioner of Income-tax, to support its conclusion that the Board exceeded its jurisdiction.

Conclusion

The Court concluded that the Board of Revenue was not justified in remanding the case for reassessment under section 9(3)(b) of the Act, as no appeals or revisions against the assessment order dated September 16, 1966, were filed. The reference was deemed an application for revision under section 15 of the Act, as substituted by the Amendment Act, and was allowed. The order dated August 11, 1975, passed by the Division Bench of the Board in the special appeal was set aside, and the parties were directed to bear their own costs.

The Court clarified that nothing in the judgment would adversely affect the rights or remedies available to G.C. Malpani against the order dated November 7, 1974, or any other remedy available under any Act or law against the recovery proceedings for the realization of the demand raised in pursuance of the assessment order dated September 16, 1966.

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