1996 (9) TMI 593 - HC - VAT and Sales Tax

Summary

Issues:
1. Refund of tax amount and challenge to the validity of an amendment introduced by Act No. 25 of 1978.
2. Assessment of sales tax, penalties imposed, appeals filed, and directions given by authorities.
3. Challenge to sub-section (8) of section 18 of the Act regarding the power of the Commissioner to extend the period of limitation.
4. Interpretation of the proviso in sub-section (8) of section 18 and its validity under Article 14 of the Constitution of India.
5. Consideration of sub-section (9) of section 18 empowering the State Government to extend the period of limitation.

Detailed Analysis:
1. The petitioner sought a refund of Rs. 97,082 and challenged an amendment introduced by Act No. 25 of 1978. The petitioner, a dealer under the M.P. General Sales Tax Act, was assessed to sales tax, penalties imposed, and appeals filed against the orders. The Board of Revenue set aside the enhancement in taxable turnover and directed revision of the assessment, reducing penalties. The Commissioner of Sales Tax moved an application for a reference to the High Court, which was rejected, leading to the challenge of sub-section (8) of section 18 regarding the power of the Commissioner to extend the period of limitation.

2. The judgment addressed the challenge to sub-section (8) of section 18, focusing on the proviso introduced by Act No. 25 of 1978. The proviso allowed for a fresh assessment to be made within two years of court orders, neutralizing the statutory period of limitation. The Court held that the power of the Commissioner to nullify the statutory provision by an executive order was impermissible. The judgment emphasized the importance of adhering to statutory limitations and the inability of executive orders to override them.

3. The Court considered the validity of the proviso in sub-section (8) of section 18 under Article 14 of the Constitution of India. It found the provision conferring a statutory period of limitation while allowing executive power to extend it as anomalous. The Court struck down the part of the proviso empowering the Commissioner to ensure expeditious assessment beyond the specified period, deeming it violative of Article 14.

4. The judgment also discussed sub-section (9) of section 18, empowering the State Government to extend the period of limitation for assessment proceedings. It referenced a previous case where the power of the State Government was upheld by the Court. The Court highlighted the need for reasons to be recorded for such extensions, subject to judicial scrutiny. It concluded that the power under sub-section (9) was specific and had been validated by the Court.

5. In conclusion, the Court allowed the petition in part, striking down the provision empowering the Commissioner to ensure expeditious assessment beyond the specified period. The judgment emphasized the importance of upholding statutory limitations and ensuring compliance with legal provisions. It directed the refund of the security amount to the petitioner, highlighting the partial success of the petition.