1989 (1) TMI 338 - HC - VAT and Sales Tax

Summary

Issues involved: Valid initiation of proceedings u/s 21 of the U.P. Sales Tax Act for assessment year 1975-76.

Summary:
The High Court of Allahabad heard a revision challenging the Sales Tax Tribunal's order for the assessment year 1975-76. The first appellate authority accepted that there was no valid initiation of proceedings u/s 21 of the Act, thus allowing the appeal by the assessee. However, the Sales Tax Tribunal, in the impugned order, allowed the appeal by the Commissioner of Sales Tax, holding that the proceedings u/s 21 were in order and proceeded to consider the quantum of assessment.

The learned counsel for the assessee argued that the assumption of jurisdiction by the Sales Tax Officer u/s 21 was not in accordance with the law, as the initiation was for fishing and roving enquiries, not based on prima facie evidence of turnover escapement. The Court agreed, stating that the initiation was solely for making enquiries, lacking a conclusion of any turnover escapement. The Sales Tax Tribunal's view that mere mention of launching an enquiry would not invalidate the proceedings u/s 21 was deemed incorrect. The Court emphasized that the notice was issued only for fishing and roving enquiries, making the Tribunal's decision erroneous.

The Court rejected the submission that mentioning making enquiries after issuing the notice would not invalidate the proceedings u/s 21. Consequently, the revision was allowed with costs, dismissing the petition.