1996 (7) TMI 523 - HC - VAT and Sales Tax

Summary

Issues:
Challenge to validity of proceedings under section 10-B of the Uttar Pradesh Sales Tax Act for assessment years 1973-74 and 1974-75, validity of clause (c) of section 10-B(3) not pressed, seeking quashing of notices dated September 15, 1982, and September 18, 1982 under section 10-B for the assessment years in question. Jurisdiction of the authority under section 10-B of the Act in the context of revisional power of the Commissioner of Sales Tax and cases of escaped assessment, under-assessment, assessed at a lower rate, etc.

Analysis:
The judgment delivered by the High Court of Allahabad addressed the challenge to the validity of proceedings under section 10-B of the Uttar Pradesh Sales Tax Act for the assessment years 1973-74 and 1974-75. The petitioners sought to challenge the initiation of these proceedings based on an application filed by the Sales Tax Officer before the Deputy Commissioner (Executive). While the validity of clause (c) of section 10-B(3) was also questioned, it was not pressed in the present petition. The petitioners specifically sought the quashing of notices issued under section 10-B for the mentioned assessment years. The assessment order for 1973-74 was passed on September 18, 1976, and for 1974-75 on September 29, 1976. The Deputy Commissioner disposed of the proceedings for 1973-74 following an interim order by dropping them, focusing the petition on the assessment year 1974-75.

The main issue raised in the judgment pertained to the jurisdiction of the authority under section 10-B of the Act, which deals with the revisional power of the Commissioner of Sales Tax. Section 21 was also highlighted concerning cases of escaped assessment, under-assessment, or assessment at a lower rate. The Court emphasized that the power under section 10-B allows the Commissioner to revise any order passed by a subordinate officer to ensure its legality or propriety. It was clarified that the Commissioner can reassess and re-examine the material and law as it existed during the original order, distinguishing this from section 21, where reassessment based on a fresh appraisal would amount to a change of opinion beyond the jurisdiction.

The judgment further delved into the parallel proceedings under sections 10-B and 21 of the Act. Drawing a comparison with the Income-tax Act, it was noted that while reassessment proceedings could be initiated under section 34, revisional jurisdiction was limited to the materials on record. Citing previous case law, the Court emphasized that revisional jurisdiction is confined to the correctness, propriety, and legality of the order based on existing records. It was concluded that the impugned notice for the assessment year 1974-75 was not sustainable under section 10-B, as the material on which it was based did not exist earlier, leading to the quashing of the notice and setting aside of the proceedings.

In summary, the judgment provided a detailed analysis of the jurisdiction under section 10-B of the Uttar Pradesh Sales Tax Act, highlighting the distinction between revisional power and reassessment, ultimately leading to the quashing of the impugned notice for the assessment year in question.