1990 (9) TMI 332 - HC - VAT and Sales Tax

Summary

Issues:
Reference under section 24(3) of the Orissa Sales Tax Act, 1947 regarding the assessment under section 12(8) of the Act without prior approval of the Assistant Commissioner as required by rule 90-A.

Analysis:
The case involved a dealer registered under the Orissa Sales Tax Act, dealing in various commodities. The dealer was permitted to pay a lump sum tax under rule 90-A(1) for the year 1978-79. However, the dealer filed the wrong return form, leading to scrutiny by the Sales Tax Officer. The Officer found the gross turnover exceeded the limit for lump sum tax, prompting cancellation of the privilege and assessment under section 12 of the Act. The Tribunal upheld the assessment, leading to a reference to the High Court.

The key issue revolved around the requirement of prior approval from the Assistant Commissioner for assessing a dealer under section 12 of the Act when the gross turnover exceeds a specified limit. Rule 90-A(4) mandates such approval to protect dealers. The absence of a clear finding of this approval in the assessment order was highlighted. However, the rule does not explicitly require recording this fact in the order, as the rule itself specifies the need for prior approval by the Assistant Commissioner.

The judgment emphasized that the Sales Tax Officer's approach to the Assistant Commissioner for canceling the compounding certificate was unnecessary under the rule's clear language. The Assistant Commissioner's acceptance of the suggestion was deemed as prior approval, satisfying the precondition for assessment under section 12. The Court held that the absence of a specific finding of the prior approval did not vitiate the assessment, as the Assistant Commissioner's acceptance effectively fulfilled the requirement.

Ultimately, the Court answered the reference question in the negative, stating that the assessment under section 12(8) of the Act was in accordance with the law, given the Assistant Commissioner's implicit approval. The judgment concluded that there would be no order as to costs, and both judges on the bench agreed with the decision.