1991 (7) TMI 375 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Jurisdiction of the Sales Tax Officer, Jhansi to initiate proceedings under Section 21 of the U.P. Sales Tax Act.
2. Validity of service of notice on the lawyer of the petitioners.
3. Timeliness of the service of notice under Section 21 of the U.P. Sales Tax Act.

Issue-wise Detailed Analysis:

1. Jurisdiction of the Sales Tax Officer, Jhansi:
The petitioners challenged the jurisdiction of the Sales Tax Officer, Jhansi, to initiate proceedings under Section 21 of the U.P. Sales Tax Act, arguing that the original assessment order was passed by the Assistant Sales Tax Officer, who should be the one to initiate such proceedings. The court clarified that the assessing authority is indeed empowered to initiate proceedings under Section 21. It was noted that the proceedings were initially started by the Assistant Sales Tax Officer but were subsequently transferred to the Sales Tax Officer, Jhansi, under Rule 81(2) of the U.P. Sales Tax Rules. Therefore, the Sales Tax Officer, Jhansi, had the jurisdiction to continue the proceedings after the transfer, making the initiation of proceedings by him neither illegal nor without jurisdiction.

2. Validity of Service of Notice on the Lawyer:
The petitioners contended that service of the notice on their lawyer was not effectual service on them, rendering the initiation of proceedings illegal. They relied on precedents such as Bhagwan Dass Munni Lal and Laxmi Narain Anand Prakash, which held that service on a lawyer who represented the assessee in original proceedings does not constitute valid service under Section 21 unless the lawyer was expressly authorized for such service. However, the court distinguished these cases, noting that they were decided after the amendment of Rule 77-A, which made the service on a lawyer after 4-12-1979 invalid. In the present case, the service was made before this amendment. The court found that the lawyer, Sri Umesh Chandra Gupta, had a Vakalatnama authorizing him to receive notices and perform various acts on behalf of the assessee for the assessment year 1973-74. Therefore, the service of notice on the lawyer was deemed valid and binding on the assessee.

3. Timeliness of the Service of Notice:
The petitioners argued that the notice was not served within four years from the date of the original assessment order, making it liable to be quashed. The court noted that the notice was served on the petitioners' counsel, who was authorized to receive such notices. Given the valid service on the authorized counsel, the court found no merit in the argument that the notice was untimely.

Conclusion:
The court dismissed the writ petition, holding that the proceedings initiated under Section 21 by the Sales Tax Officer, Jhansi, were valid and within jurisdiction. The service of notice on the petitioners' lawyer was deemed effectual and timely. Consequently, the interim order was vacated, and the respondent authority was directed to pass the appropriate order in accordance with the law if the assessment proceedings for the year 1973-74 had been completed but not yet signed.