1993 (4) TMI 284 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Validity of Notification dated January 7, 1989.
2. Scope of Section 23-B of the Rajasthan Sales Tax Act.
3. Initiation of proceedings under Section 16(1)(k) of the Rajasthan Sales Tax Act.

Issue-wise Detailed Analysis:

1. Validity of Notification dated January 7, 1989:
The petitioner, Northern Railway, challenged the notification dated January 7, 1989, which inserted two provisos for the period December 22, 1972, to June 17, 1975. The provisos stated that if goods purchased by a government department under the concessional rate were used for commercial purposes, the department would be liable to pay the difference between the full rate and the concessional rate and would not be entitled to a refund. The court held that the State Government has the power under Section 4(2) of the Rajasthan Sales Tax Act to issue notifications granting exemptions prospectively or retrospectively. However, it cannot retrospectively impose conditions that deny the exemption already granted. The court concluded that the notification dated January 7, 1989, was ultra vires the power conferred under Section 4(2) of the Act.

2. Scope of Section 23-B of the Rajasthan Sales Tax Act:
The petitioner argued that once the assessing authority finalizes the assessment and determines the tax payable at a concessional rate based on the declaration forms, the provisions of Section 23-B do not permit reinvestigating the validity of the forms issued by the purchaser. The court analyzed Section 23-B, which allows a refund of any amount deposited or paid as tax if subsequently found not payable. The refund can be claimed by the person who actually suffered the incidence of tax. The court emphasized that the scope of Section 23-B does not permit redetermination of liability by examining the declaration form once the assessment of the seller is finalized. The assessing authority's jurisdiction under Section 23-B is limited to determining who is entitled to the refund, whether the claim is within the limitation period, and whether the applicant has suffered the incidence of tax. The court held that the assessing authority acted beyond its jurisdiction by denying the refund based on the use of declaration forms, which had already been examined during the seller's assessment proceedings.

3. Initiation of proceedings under Section 16(1)(k) of the Rajasthan Sales Tax Act:
The petitioner contended that proceedings under Section 16(1)(k) cannot be initiated when a refund is claimed by the purchaser. However, the court found it unnecessary to examine this contention in light of the decisions on the first two issues. The court noted that the other three writ petitions were pending before the Deputy Commissioner (Appeals) or Tribunal, and it would not be proper to examine the correctness of various orders passed by the authorities under the Act. The court held that the notification dated January 7, 1989, was ultra vires, and thus, the writ petitions Nos. 1118 of 1991, 848 of 1991, and 2826 of 1991 were partly allowed.

Conclusion:
The court allowed Writ Petition No. 957 of 1991, quashing the notification dated January 7, 1989, and partly allowed Writ Petitions Nos. 1118 of 1991, 848 of 1991, and 2826 of 1991. The court emphasized that the assessing authority's jurisdiction under Section 23-B does not extend to re-examining the declaration forms once the seller's assessment is finalized.