2009 (9) TMI 882 - HC - VAT and Sales Tax

When the revisional authority had already passed, on May 27, 2002, an order holding that since the alleged transportation of taxable consignments had taken place prior to February 28, 2000, was recourse to section 32(1)(a) not permissible in law? Whether a Superintendent of Tax is empowered to issue a notice of demand for payment of a sum, which has been held, by the revisional authority, to be not recoverable? Held that - The revisional authority s order can be challenged, under the scheme of the TST Act and the Rules framed thereunder, before the Tribunal as envisaged under the statute in question. So long as the order, passed by a revisional authority remains in force, this order would be binding both on the assessee as well as the authorities, who are subordinate to the revisional authority. If an order passed by a revisional authority is bad in law the remedy lies either in challenging the order before the Tribunal as aforesaid or by taking recourse to rectification proceeding as envisaged by section 12 of the TST Act. When one reverts to the case at hand, it becomes clear that even if the conclusion reached by the revisional authority in its order dated May 27, 2002, was illegal or incorrect, the Superintendent of Taxes concerned could not have passed any order and issue notice of demand, such as the one, which stands impugned in this writ petition, and/or pass any such order, which stands impugned in this writ petition. Thus while the notice of demand dated May 12/13, 2004, and also the impugned order dated May 14, 2004, are hereby set aside and quashed, the respondents are left at liberty to take recourse to such provisions of law as may be permissible for the remedy of their grievances.

Summary

Issues Involved:
1. Requirement and compliance of registration and permits under the Tripura Sales Tax Act, 1976 (TST Act) and Tripura Sales Tax Rules, 1976 (TST Rules).
2. Legality of penal actions and demand notices issued by the Superintendent of Taxes.
3. Validity and binding nature of revisional authority's orders.
4. Jurisdiction and power of the Superintendent of Taxes post revisional authority's decision.

Issue-wise Detailed Analysis:

1. Requirement and Compliance of Registration and Permits:
The petitioner, a transporter of taxable goods in Tripura, was required to register under the TST Act and obtain necessary permits (Forms No. XIV and XVIII) for transporting goods. The petitioner was accused of delivering 753 taxable consignments without the requisite permits, leading to penal actions and demand notices from the Superintendent of Taxes.

2. Legality of Penal Actions and Demand Notices:
Following show-cause notices, the Superintendent of Taxes issued an order on September 21, 1998, penalizing the petitioner for delivering taxable consignments without permits. The petitioner's branch manager admitted to delivering some consignments without permits and sought composition of offences under section 32 of the TST Act. The taxable liability was calculated at Rs. 10,57,257, with a composition amount of Rs. 21,14,464, totaling Rs. 31,71,696. The petitioner challenged these actions, arguing that the verification was delayed and records could not be maintained properly.

3. Validity and Binding Nature of Revisional Authority's Orders:
The revisional authority, on May 27, 2002, held that since the deliveries occurred before August 22, 2000, section 32A of the TST Act was not applicable. Despite this, the Superintendent of Taxes issued further notices and demands, which the petitioner contested. The court emphasized that orders from the revisional authority are binding on subordinate authorities, and failure to comply would undermine the hierarchical system of justice administration.

4. Jurisdiction and Power of the Superintendent of Taxes Post Revisional Authority's Decision:
The court noted that the Superintendent of Taxes could not issue demands or orders contrary to the revisional authority's decision. The revisional authority's order, unless challenged and overturned by a higher authority or rectified under section 12 of the TST Act, remains binding. The court held that the Superintendent's actions post the revisional authority's decision were unauthorized.

Conclusion:
The court set aside and quashed the notice of demand dated May 12/13, 2004, and the impugned order dated May 14, 2004. It allowed the respondents to seek legal remedies for their grievances but emphasized the binding nature of the revisional authority's decisions on subordinate authorities. The writ petition was disposed of with no order as to costs.