1992 (8) TMI 274 - HC - VAT and Sales Tax

Summary

Issues:
1. Interpretation of exemption under G.O. Press No. 2238, Revenue dated September 1, 1964.
2. Application of section 34 of the Act to set aside relief granted by first appellate authority.
3. Consideration of exemption for canteen sales based on Supreme Court decisions.
4. Judicial review of Joint Commissioner's decision on tax liability.

Analysis:

1. The appellant, a company dealing in various goods, disputed a turnover related to sales of edibles and refreshments in their canteen for the assessment year 1971-72. The assessing officer initially denied exemption under G.O. Press No. 2238, but the first appellate authority upheld the appellant's claim, stating they were entitled to the benefits of the exemption (para 1).

2. Subsequently, the Commissioner invoked section 34 powers to set aside the relief granted by the first appellate authority, arguing that the appellant did not qualify for the exemption due to certain companies not being under a statutory obligation to run the canteen. The Joint Commissioner upheld this decision, citing a previous court ruling. The appellant's reliance on another Supreme Court decision was summarily rejected by the revisional authority (para 2).

3. The High Court found legal fault in the Joint Commissioner's conclusion, emphasizing that the appellant did cater to the needs of their employees and employees of other companies, even those not obligated to run a canteen. The Court noted that the decision in Deputy Commissioner v. Manager-in-charge of the Canteen, A.B.T. Premises would apply against the appellant's claim for exemption (para 3).

4. Despite the above, the Court criticized the Joint Commissioner for not providing a detailed analysis of the appellant's argument based on the Supreme Court decision in Northern India Caterers (India) Ltd. v. Lt. Governor of Delhi. The Court directed the assessing authority to reevaluate the tax liability of the turnover from canteen sales in light of the Supreme Court decision, emphasizing the need for a thorough examination of the facts (para 4).

5. The Court referenced a Division Bench judgment to support the appellant's position, highlighting the importance of factual findings in determining tax liability. The Court emphasized the need for a judicious adjudication by the assessing authority and directed a reconsideration of the taxability of the turnover related to canteen sales based on the Supreme Court decision (para 5).

6. Consequently, the Court set aside the Joint Commissioner's order regarding the taxability of canteen sales and remitted the matter to the assessing authority for a detailed examination in accordance with the Supreme Court decision. The assessing authority was instructed to provide the appellant with a fair opportunity to present their case, ensuring compliance with the law (para 6).