2009 (1) TMI 783 - HC - VAT and Sales Tax

Whether the Tribunal was justified in holding that rule 23A was repugnant to section 2(o) and interest was not leviable on the tax calculated on the value of the raw materials purchased? Whether the Tribunal was justified and was empowered to hold that rule 23A was repugnant to section 2(o) of the Delhi Sales Tax Act, 1975? Held that - we are altogether unable to hold that this particular question should be deemed to have been dealt with by the Tribunal or treated as having been answered by it against the department when it was fully conscious of it and yet it deliberately refused to answer the question. So far as we are able to understand the spirit and intendment of section 66 of the Act, it does not seem to go so far as to contemplate that a Tribunal can be held to be within its bounds in seeking for advice on a question which was specifically raised before it but which it has not thought fit to decide not by mistake or accident but by deliberate choice. Under the circumstances, we have felt persuaded to hold that we should decline to answer the reference. In the instant case the judgment of the Tribunal dated November 2, 1988 The entire focus was as to whether the respondent/dealer was an assessee in default despite the fact that it had paid tax every quarter based on the return filed by it. In the circumstances, we deem it fit to return the reference unanswered.

Issues Involved:
1. Whether the Tribunal was justified in holding that rule 23A was repugnant to section 2(o) and interest was not leviable on the tax calculated on the value of the raw materials purchased.
2. Whether the Tribunal was justified and empowered to hold that rule 23A was repugnant to section 2(o) of the Delhi Sales Tax Act, 1975.

Detailed Analysis:

Issue 1: Justification of Rule 23A Repugnancy and Interest Levy

The Tribunal had concluded that the respondent/dealer was required to show the price of the transferred goods or unutilized raw material purchased on the basis of the registration certificate in the turnover, which is yearly. The tax was to be paid on the basis of the turnover within one month from the date of the demand notice. If the dealer did not pay the tax within one month from the service of the demand notice, only then would the dealer be liable to pay interest. The Tribunal followed an earlier decision in the case of Hamdard Dawakhana (Wakf) and concluded that the assessing authority was not justified in levying interest on the assumption that the tax was liable to be paid along with each quarterly return. Consequently, the Tribunal allowed the appeal and set aside the orders of the authority below regarding the imposition of interest, while upholding the levy of tax.

Issue 2: Empowerment of Tribunal to Hold Rule 23A Repugnant

The Tribunal had based its decision on the construction of the provisions of section 27(1) of the Act. The Tribunal in the case of Hamdard Dawakhana (Wakf) made a passing reference to the submissions raised by the counsel on the aspect of rule 23A being repugnant to section 2(o) of the Act, but the decision was not based on this aspect. The Tribunal's judgment dated November 2, 1988, was predicated on the interpretation of section 27 of the Act read with sub-sections (3) and (2) of section 21, as also, sections 23, 24, and 25 of the Act. The judgment was not founded on rule 23A being repugnant to section 2(o) of the Act. The passing observation that rule 23A contained an element of repugnancy vis-a-vis section 2(o) could at best be described as an obiter dicta.

Conclusion:

The court concluded that the questions referred did not arise from the impugned judgment. The Tribunal's decision was based on the interpretation of the relevant sections of the Act, not on the repugnancy of rule 23A. Therefore, the court deemed it unnecessary to answer the questions referred and returned the reference unanswered.

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