1990 (4) TMI 273 - HC - VAT and Sales Tax

Summary

Issues:
- Validity of orders passed by Excise and Taxation Officer and Joint Excise and Taxation Commissioner
- Right to appeal under the Haryana General Sales Tax Act, 1973
- Effect of the amendment of section 6 by the Haryana General Sales Tax (Second Amendment and Validation) Act, 1989
- Interpretation of legal provisions regarding tax liability on works contracts
- Jurisdiction of Assessing Authority and appellate authority

Analysis:

The petitioner-company, engaged in works contracts, challenged orders by the Excise and Taxation Officer and Joint Excise and Taxation Commissioner. The Assessing Authority levied tax and penalty on the petitioner based on works contracts done, despite the petitioner's registration application and exemption on sales until March 31, 1987. The petitioner appealed, arguing against tax liability due to a retrospective amendment in the Act. The appellate authority, citing the amendment, held the appeal not maintainable, leading to the present petition.

The central issue was the impact of the 1989 amendment on the right to appeal under the Haryana General Sales Tax Act. The amendment exempted contractors from tax liability for works contracts executed between April 1, 1987, and March 31, 1989, if certain conditions were met. The court analyzed the amendment's language, emphasizing the unfettered right of appeal under the amended Act and the retrospective operation of the exemption provision.

The court scrutinized the legal provisions governing tax liability on works contracts, particularly focusing on the definitions of "sale" and the validation provisions of the 1989 Amendment Act. It highlighted the immunity provided by the validation provisions to actions taken during the specified period, preventing challenges in courts or tribunals.

Moreover, the court addressed the jurisdictional aspect, emphasizing that the Assessing Authority's findings creating tax liability should not be immune from appeal scrutiny. It underscored that depriving a contractor of the right to appeal on valid grounds would be against the law and constitutional principles.

Ultimately, the court quashed the appellate authority's order, directing a review of the petitioner's appeal on merit. It also ordered the release of the bank guarantee and scheduled a hearing before the appellate authority. The judgment allowed the writ petition in favor of the petitioner, ensuring a fair assessment of the tax liability based on the legal provisions and principles discussed in the judgment.