1995 (5) TMI 249 - HC - VAT and Sales Tax

Issues Involved:
1. Jurisdiction of the Assistant Commissioner of Taxes under Section 31(1) of the Assam Sales Tax Act, 1947.
2. Conditions precedent for exercising power under Section 31(1) of the Assam Sales Tax Act, 1947.
3. Competency of the Assistant Commissioner of Taxes under Section 9(2) of the Central Sales Tax Act, 1956.
4. Validity of the Assistant Commissioner of Taxes imposing findings contrary to the Superintendent of Taxes.
5. Justification for ignoring adjournment petitions.
6. Legality of the impugned order post High Court stay order.

Detailed Analysis:

1. Jurisdiction of the Assistant Commissioner of Taxes under Section 31(1) of the Assam Sales Tax Act, 1947:
The petitioner argued that the Assistant Commissioner of Taxes lacked jurisdiction under Section 31(1) of the Assam Sales Tax Act to issue the impugned order, as the Superintendent of Taxes had already concluded that the petitioner-firm was not liable for registration under Section 7(1) of the Central Sales Tax Act. The court found that the Assistant Commissioner of Taxes did not have the authority to override the Superintendent of Taxes' decision without proper jurisdiction, making the impugned order null and void.

2. Conditions precedent for exercising power under Section 31(1) of the Assam Sales Tax Act, 1947:
The petitioner contended that the conditions precedent for exercising power under Section 31(1) were non-existent. The court noted that Section 31(1) allows the Commissioner to revise orders only if they are erroneous and prejudicial to the interests of the Revenue. The Assistant Commissioner failed to establish these conditions, rendering the impugned order illegal and without jurisdiction.

3. Competency of the Assistant Commissioner of Taxes under Section 9(2) of the Central Sales Tax Act, 1956:
The petitioner argued that the Assistant Commissioner of Taxes was not the competent authority under Section 9(2) of the Central Sales Tax Act to pass the order for registration under Section 7(1). The court agreed, stating that Section 9(2) does not grant the authority to order registration, which is governed by Section 7 of the Central Sales Tax Act. Thus, the Assistant Commissioner exceeded his jurisdiction.

4. Validity of the Assistant Commissioner of Taxes imposing findings contrary to the Superintendent of Taxes:
The petitioner claimed that the Assistant Commissioner imposed his own findings without concluding that the Superintendent of Taxes' order was erroneous and prejudicial to Revenue interests. The court found that the Assistant Commissioner acted beyond his jurisdiction by not adhering to the requirement of proving the Superintendent's order erroneous, making the impugned order illegal.

5. Justification for ignoring adjournment petitions:
The petitioner argued that the Assistant Commissioner unjustifiably ignored the adjournment petitions and proceeded with the order. The court noted that the Assistant Commissioner had previously granted adjournments and should have considered the petitioner's request on May 17, 1991. Ignoring this request and proceeding with the order was deemed unjustified and improper.

6. Legality of the impugned order post High Court stay order:
The petitioner contended that the impugned order was passed despite the High Court's stay order. The court referred to the Supreme Court's decision in Mulraj v. Murti Raghunathji Maharaj, stating that a stay order prohibits further proceedings. Since the Assistant Commissioner proceeded with the order despite being informed of the stay, the order was deemed illegal and without jurisdiction.

Conclusion:
The court allowed the writ application, quashed the notice dated November 29, 1990, and the order dated May 29, 1991. The court emphasized that the Assistant Commissioner of Taxes acted beyond his jurisdiction and without fulfilling the necessary conditions precedent, rendering the impugned orders illegal and without authority. The parties were directed to bear their own costs.

Petition allowed.

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