2010 (8) TMI 830 - HC - VAT and Sales Tax

Whether the initiation of proceedings under section 10B of the Act is based on the observation made by the Tribunal, while no such observation should be made by the Tribunal, inasmuch as the appeals filed by the Commissioner of Trade Tax had become infructuous in view of the final order being passed? Whether section 10B proceeding is barred by limitation? Held that - In relief No. (i), a prayer has been made only for a mandamus to respondent No. 2 to stay the proceeding initiated under section 10B of the Act for the assessment year 1999-2000. No relief has been claimed for quashing of the notice under section 10B of the Act. Further by prayer No. (ii) a mandamus has been sought for the stay of proceedings for realisation of tax assessed for the assessment year 2001-02 and no prayer has been made for quashing of the assessment order for the assessment year 2001-02. By relief No. (iii) a prayer has been made for the mandamus to respondent No. 3 to stay the assessment proceedings for the assessment year 2002-03. No prayer has been made for quashing of the notice issued for the assessment proceedings for the year 2002-03. Appeal dismissed.The relief claimed in the present writ petition has also become infructuous and they do not survive. Appeal dismissed.

Issues:
1. Relief sought for mandamus directing respondent No. 2 to stay proceedings under section 10B for assessment year 1999-2000.
2. Relief sought for mandamus directing respondent No. 3 to stay proceedings for tax realization for assessment year 2001-02.
3. Relief sought for mandamus directing respondent No. 3 to stay assessment proceedings for assessment year 2002-03.
4. Challenge of the initiation of proceedings under section 10B based on Tribunal's observation.
5. Contention of proceedings being barred by limitation.

Analysis:
1. The petitioner, a partnership firm, filed monthly returns for the assessment year 1999-2000 under the U.P. Trade Tax Act, admitting tax at 2.5%. However, the assessing authority levied tax at 10% as an unclassified item. The Deputy Commissioner (Appeals) ruled in favor of the petitioner, but the Trade Tax Tribunal expressed a differing opinion. Subsequently, the assessing authority accepted the petitioner's claim and levied tax at 2.5%. The petitioner challenged the initiation of proceedings under section 10B, but the court found the relief sought limited, as only a mandamus to stay proceedings was requested, not the quashing of the notice itself.

2. For the assessment year 2001-02, where tax was assessed at 10%, the petitioner sought a mandamus to stay proceedings for tax realization. Similarly, for the assessment year 2002-03, the petitioner requested a mandamus to stay assessment proceedings. However, no prayer was made for quashing the assessment orders or notices for these years. The court noted that a related Trade Tax Revision had been dismissed as infructuous, leading to the conclusion that the relief sought in the writ petition had also become infructuous and did not survive.

3. The petitioner contended that the initiation of section 10B proceedings was based on the Tribunal's observation, which was challenged in a revision. However, the court found that the relief sought was limited to staying the proceedings and did not include quashing the notice under section 10B. As the related revision had been dismissed as infructuous, the court concluded that the writ petition failed and was dismissed, with the interim order vacated and no costs awarded.

In conclusion, the court's judgment emphasized the limited nature of the relief sought in the writ petition, the dismissal of related revisions, and the consequent finding that the petition had become infructuous, leading to its dismissal without costs.

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