1995 (1) TMI 320 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Jurisdiction of the Court under Article 226 of the Constitution of India.
2. Limitation period for issuing reassessment notices under Section 12 of the Rajasthan Sales Tax Act.
3. Whether "woollen felt" qualifies as "woollen fabric" for tax exemption purposes.
4. Alternative remedy available to the appellant-petitioners.
5. Binding nature of the findings of the learned single Judge on the tax authorities.

Issue-wise Detailed Analysis:

1. Jurisdiction of the Court under Article 226 of the Constitution of India:
The learned single Judge dismissed the writ petitions on the ground that the appellant-petitioners had an alternative remedy available under the Rajasthan Sales Tax Act. However, the appellants contended that the Court should exercise its extraordinary jurisdiction under Article 226, especially since the notices were allegedly barred by limitation. The Court acknowledged that while normally it should not interfere under Article 226 when an alternative remedy exists, it may do so in appropriate cases, such as when the impugned notices are barred by limitation.

2. Limitation period for issuing reassessment notices under Section 12 of the Rajasthan Sales Tax Act:
The Court examined Section 12(2) of the Rajasthan Sales Tax Act, which prescribes an eight-year limitation period for issuing reassessment notices. The proviso to Section 12(2) allows reassessment beyond this period only to give effect to an order under Sections 13, 14, or 15, or an order of any competent court. The Court concluded that the term "an order of any competent court" should be confined to orders under the Sales Tax Act and not other statutes. Consequently, the notices for the assessment years 1965-66, 1966-67, and 1967-68 were deemed barred by limitation and quashed.

3. Whether "woollen felt" qualifies as "woollen fabric" for tax exemption purposes:
The learned single Judge had previously determined that "woollen felt" was not "woollen fabric," thus negating the tax exemption. However, the appellate Court chose not to express an opinion on this issue, leaving it to the tax authorities to decide independently, without being influenced by the findings of the learned single Judge.

4. Alternative remedy available to the appellant-petitioners:
The respondents argued that the appellants had an alternative remedy under the sales tax laws, including contesting the notices before the tax authorities and appealing any adverse decisions. The Court recognized this but chose to exercise its jurisdiction under Article 226 for the years where the notices were barred by limitation.

5. Binding nature of the findings of the learned single Judge on the tax authorities:
The Court noted that the learned single Judge had erred by deciding the merits of the case, specifically whether "woollen felt" was "woollen fabric." The appellate Court clarified that the tax authorities should independently decide this issue, ignoring the findings of the learned single Judge.

Conclusion:
The special appeals were partly allowed. The reassessment notices for the assessment years 1965-66, 1966-67, and 1967-68 were quashed as they were barred by limitation. The appeals for the assessment years 1968-69, 1969-70, and 1970-71 were dismissed on the ground of the availability of an alternative remedy. The tax authorities were directed to decide the issue of whether "woollen felt" is "woollen fabric" independently, without being influenced by the findings of the learned single Judge. Each party was ordered to bear their own costs.