1990 (8) TMI 376 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Validity of the withdrawal notification.
2. Compliance with the conditions for the exercise of the power of withdrawal.
3. Whether the petitioner could raise objections to the notices by filing comprehensive replies.

Detailed Analysis:

1. Validity of the Withdrawal Notification:

The petitioner challenged the validity of the withdrawal notification on the grounds that it was not properly published and lacked clarity. The court examined both the concession and withdrawal notifications. The concession notification clearly specified the tax rate on white printing paper sold to newspaper concerns. In contrast, the withdrawal notification was ambiguous and did not specifically mention the commodity or goods affected by the withdrawal. The court emphasized that the notification must be clear and specific to inform the public effectively. The withdrawal notification failed to meet this standard, rendering it ineffective and inoperative. The court cited several precedents affirming that delegated legislation must be clear and properly published to be valid.

2. Compliance with the Conditions for the Exercise of the Power of Withdrawal:

The petitioner argued that the withdrawal notification did not comply with the conditions set out in section 8(5) of the Central Sales Tax Act, which requires the State Government to be satisfied that it is necessary to withdraw the concession in the public interest. The court noted that the withdrawal notification did not mention public interest or the State Government's satisfaction with it. The court examined the proceedings of the Board dated 31st March 1967, which were supposed to reflect the reasons for the withdrawal. However, these proceedings did not address the specific concession granted to the sales of white printing paper to newspaper concerns. The court concluded that there was a lack of application of mind and non-compliance with the conditions for the exercise of the power of withdrawal, rendering the withdrawal notification illegal and invalid.

3. Whether the Petitioner Could Raise Objections to the Notices by Filing Comprehensive Replies:

The learned single Judge had dismissed the writ petitions on the grounds that the petitioner could raise objections by filing comprehensive replies to the notices. However, the appellate court found that the impugned notices suffered from fundamental infirmities that went to the root of the matter. The court emphasized that when such significant issues are brought to its attention, it cannot ignore them and must exercise its powers to remedy the situation. Consequently, the court allowed the writ appeals, set aside the orders of the learned single Judge, and allowed the writ petitions as prayed for.

Conclusion:

The court held that the withdrawal notification was invalid due to a lack of clarity and proper publication. Additionally, the notification did not comply with the conditions for the exercise of the power of withdrawal as it did not mention public interest or the State Government's satisfaction. The court also found that the petitioner could not be expected to raise objections through comprehensive replies when the notices themselves were fundamentally flawed. Therefore, the court allowed the writ appeals and set aside the orders of the learned single Judge.