1993 (2) TMI 309 - HC - VAT and Sales Tax

Summary

Issues:
1. Validity of recognition certificate under U.P. Sales Tax Act, 1948
2. Correctness of declarations issued by the revisionist
3. Time limitation for passing orders under the Act

Validity of Recognition Certificate:
The revisionist, a co-operative society engaged in soap production, held a recognition certificate granting full exemption from sales tax on raw material purchases. The Revenue contended that a later notification disentitled the revisionist from the concession under section 4B due to its recognition by the Khadi and Village Industries Board. The court held that errors in the recognition certificate did not render the declarations in form III-B false. Citing Massay Engineering Works v. Commissioner of Sales Tax, the court emphasized that if declarations align with the recognition certificate, they cannot be deemed false.

Correctness of Declarations:
The declarations in form III-B confirmed the use of raw materials for notified goods and possession of a recognition certificate. The court noted that none of the authorities proved any false statements in the declarations. It rejected the Revenue's argument that the recognition certificate was wrongly issued, stating that the dealer should not bear the consequences of the department's oversight. Referring to a previous judgment, the court ruled that the declarations were neither wrong nor false, absolving the revisionist of liability.

Time Limitation for Passing Orders:
The impugned orders were issued more than eight years after the relevant assessment years, exceeding the four-year limitation period under section 21(2) of the Act. The Revenue argued that orders under section 3B were not assessments, but the court disagreed. It interpreted assessment broadly to include determining payable amounts akin to sales tax. The court highlighted the necessity of a demand notice post-assessment, emphasizing that the limitation period applies to determining dues other than sales tax. Relying on Andhra Pradesh High Court's judgment, the court held that the impugned orders were time-barred and quashed them.

In conclusion, the court allowed the revisions, quashing the impugned orders and directing each party to bear its costs.