1988 (9) TMI 316 - HC - VAT and Sales Tax

Summary

Issues:
1. Validity of the notice issued under section 11-A of the Rajasthan Sales Tax Act, 1954.
2. Compliance with the provisions of the RST Act regarding the timing of the notice issuance.
3. Applicability of provisional assessment under section 7-B of the RST Act.

Analysis:
1. The judgment addressed the validity of a notice issued under section 11-A of the Rajasthan Sales Tax Act, 1954. The petitioner, a private limited company manufacturing cement, challenged the notice dated 18th February, 1988 (annexure 5), which demanded payment based on previous annexures dated 15th February, 1988, and 17th February, 1988. The petitioner argued that the notice was premature as it was issued before the expiration of the specified timeframes for payment mentioned in the previous annexures.

2. The court considered the timing of the notice issuance crucial. It was noted that the demands raised under annexures 1 and 2 had been set aside by the appellate court. The petitioner contended that the demands were related to provisional assessments made under section 7-B of the RST Act. The court highlighted the provisions of section 7-B, emphasizing that the tax amount determined under provisional assessment is payable immediately by the dealer, as per the best judgment of the assessing authority.

3. Additionally, the judgment discussed the procedural requirements under Rule 31 of the Rajasthan Sales Tax Rules, 1955. The rule mandates that the assessing authority must serve a notice on the dealer specifying the tax amount assessed and providing a minimum of fifteen days for payment. The court emphasized that the notice under section 11-A could only be issued if the dealer failed to pay the due tax, penalty, or demand. In this case, the court found that the notice (annexure 5) was not issued in compliance with the provisions of section 11-A and the Rules.

4. As a result, the court allowed the writ petition, quashing annexure 5 dated 18th February, 1988. However, the court directed the State Bank to hold the money for two weeks to allow the assessing authority to take appropriate action in accordance with the rules. The judgment concluded by stating that costs were made easy, indicating the decision in favor of the petitioner.

In conclusion, the High Court of Rajasthan ruled in favor of the petitioner, emphasizing the importance of procedural compliance and timing in issuing notices under the Rajasthan Sales Tax Act, 1954.