1994 (2) TMI 288 - HC - VAT and Sales Tax

Summary

Issues:
Challenge against the amount fixed by way of composition under the Rajasthan Entertainments and Advertisements Tax Act, 1957.

Detailed Analysis:
The petitioner filed a writ petition against the order of the Deputy Commissioner (Administration), Commercial Taxes Department, Kota, and the Additional Commissioner, Commercial Taxes, Rajasthan. The challenge was regarding the amount fixed by way of composition under the Rajasthan Entertainments and Advertisements Tax Act, 1957. The petitioner had applied for an increase in rates from May 1, 1992, but due to lack of permission, the rates were not increased as mentioned in a subsequent letter dated July 30, 1992. The Deputy Commissioner considered the increase from the first letter but did not account for the information in the second letter. An application for rectification was denied, and the revision before the Additional Commissioner upheld the original order.

The petitioner argued that the authorities had overlooked the second letter and that the enhanced rates were not actually collected. It was also claimed that there was a mistake in the calculation of the amount, which was not addressed. The court allowed the learned counsel for the respondent to verify whether the enhanced rates were collected during the period in question. The respondent's counsel conceded that there was no evidence to suggest that the enhanced rates were enforced during that period. The respondent contended that the order was based on the petitioner's application and did not require interference.

The court noted that the order was not solely based on the petitioner's admission, as the petitioner had subsequently informed the authorities that the enhanced rates were not enforced due to lack of permission. The court emphasized that the authorities should have considered the subsequent letter and conducted an inquiry or provided evidence to support the claim that the enhanced rates were charged. Since there was no proof that the enhanced rates were applied, it was deemed improper to fix the composition fee based on those rates. Regarding the calculation mistake, the court acknowledged its existence. Consequently, the orders of the Deputy Commissioner and the Additional Commissioner were set aside, and the matter was remanded for re-calculation of the composition amount.

In conclusion, the court allowed the writ petition, directing the respondents to charge the composition fee based on the old rate for a specific period and to maintain the fixed amount for the subsequent period, subject to corrections and recalculations as necessary.