1994 (11) TMI 410 - HC - VAT and Sales Tax

Summary

Issues:
Challenge to notice under section 21 of the U.P. Sales Tax Act, 1949 for assessment years 1977-78 and 1978-79 based on jurisdictional error and alleged escaped assessment.

Analysis:
The petitioner sought to quash the notice issued under section 21 of the U.P. Sales Tax Act, 1949 for the assessment years 1977-78 and 1978-79. The petitioner contended that the notice did not specify the turnover of sales that had escaped assessment, and the respondent did not disclose this information despite the petitioner's request. The petitioner argued that the notice was issued in error, questioning the jurisdiction of the authority.

The respondent's defense was that the petitioner had been assessed at a lower tax rate previously, leading to the notice under section 21 of the Act. The Commissioner of Sales Tax had issued a circular in 1979, stating that dry cell batteries were taxable at 7 per cent. The assessing authority then assessed the petitioner at this rate, along with a 1 per cent surcharge. The petitioner argued that no turnover had escaped assessment, challenging the legality and jurisdiction of the notice issued.

The petitioner, upon receiving the notice, requested information regarding the specific turnover that had allegedly escaped assessment. However, the assessing authority did not provide a response despite two applications from the petitioner. The court noted that there was no evidence of any turnover of sale escaping assessment, as neither the notice nor the counter-affidavit specified the details. The court cited relevant case law, including Commissioner of Sales Tax v. Geep Industrial Syndicate Ltd., to support the conclusion that the notice was without jurisdiction and unsustainable.

Based on the lack of evidence showing any turnover of sale had escaped assessment and the failure to specify details in the notice, the court quashed the notice dated May 8, 1981, for the assessment years 1977-78 and 1978-79. The court allowed the petition with costs and vacated the stay order dated June 26, 1981, thereby ruling in favor of the petitioner.