1979 (5) TMI 150 - HC - VAT and Sales Tax

Summary

Issues:
1. Validity of notice under Section 21 for re-assessment.
2. Impact of defect in notice on assessment proceedings.

Analysis:

Issue 1: Validity of notice under Section 21 for re-assessment
The judgment addresses the contention raised by the assessee firm regarding the validity of the notice issued under Section 21 of the U.P. Sales Tax Act. The notice was addressed to the old firm name, which had been reconstituted with new partners under a different name. Despite the change in the firm's name and registration, the notice was served incorrectly on the old firm. The judge highlighted the gross negligence of the authorities in issuing the notice to the wrong entity, which had ceased to exist. The judge referred to past controversies regarding the firm's status and emphasized that the notice's incorrect addressing was a significant error.

Issue 2: Impact of defect in notice on assessment proceedings
The judgment draws upon legal precedents, including the Supreme Court's ruling in Narayana Chetty v. Income Tax Officer, to establish the critical nature of a valid notice in reassessment proceedings. It is emphasized that the service of a valid notice is a condition precedent for the validity of any reassessment. The judgment cites examples where defects in notices rendered reassessment proceedings void. The judge concluded that the defect in the notice, addressing the wrong entity, was fatal to the assumption of jurisdiction by the Sales-tax Officer under Section 21. Consequently, the entire proceedings were deemed vitiated in law, leading to the quashing of the Judge (Revisions) order.

In conclusion, the judgment allowed the revision, holding the defect in the notice as fatal to the continuation of proceedings under Section 21 of the Sales Tax Act. The order of the Judge (Revisions) was quashed, and costs were to be borne by the parties. The judgment instructed the transmission of a copy to the Judge (Revision) for compliance with the ruling.