1974 (10) TMI 108 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Validity of the rectification order under Section 22 of the U.P. Sales Tax Act.
2. Applicability of the Supreme Court and High Court decisions on apparent mistakes.
3. Taxability of coal turnover in U.P.
4. Time limitation for rectification under Section 22 of the U.P. Sales Tax Act.
5. Adequacy of notice and violation of natural justice principles.

Issue-wise Detailed Analysis:

1. Validity of the rectification order under Section 22 of the U.P. Sales Tax Act:
The petitioner challenged the rectification order dated 26th March 1974, issued by the Sales Tax Officer under Section 22 of the U.P. Sales Tax Act. The petitioner argued that the original assessment order dated 27th March 1971 did not contain any apparent mistake that warranted rectification. The court, however, found that the Sales Tax Officer had relied on a misapprehension of the law as clarified in subsequent judgments, specifically in the case of Messrs. Singhal and Co. v. State and others. The court concluded that the mistake in the original order was apparent on the face of the record and did not require elaborate argument or prolonged debate to be established.

2. Applicability of the Supreme Court and High Court decisions on apparent mistakes:
The petitioner cited several cases, including Master Construction Co. (P) Ltd. v. State of Orissa, Concrete Spun Pipe Works v. Sales Tax Officer, and Lakshmi Narain Gauri Shanker v. State of U.P., to argue that the rectification was not permissible. The court distinguished these cases by noting that Section 22 of the U.P. Sales Tax Act does not restrict the correction of apparent errors to those arising from accidental slips or omissions. The court emphasized that an error apparent on the face of the record could not involve re-argument on merits or new arguments not advanced initially.

3. Taxability of coal turnover in U.P.:
The petitioner contended that the turnover of Rs. 5,59,172.38 could not be taxed in U.P. due to the nature of inter-State sales. The court rejected this argument, stating that subsequent sales by a registered dealer in the course of inter-State trade are taxable in the state where the dealer is registered. The court referred to its previous decision in Messrs. Singhal and Co. v. State and others, affirming that the turnover was indeed taxable in U.P.

4. Time limitation for rectification under Section 22 of the U.P. Sales Tax Act:
The petitioner argued that the rectification order was barred by time as it was communicated to them on 31st March 1974, beyond the three-year limitation period. The court clarified that the rectification was made on 26th March 1974, within the three-year period, and that the date of communication was immaterial. The court also discussed the implications of the Supreme Court's decision in Raja Harish Chandra Raj Singh v. Deputy Land Acquisition Officer, concluding that the rectification date is the date when the order is written, signed, and made part of the original assessment order.

5. Adequacy of notice and violation of natural justice principles:
The petitioner claimed that the notice served on 22nd March 1974, for a hearing on 25th March 1974, did not provide adequate time to prepare objections, thus violating principles of natural justice. The court found no merit in this argument, noting that the petitioner had raised all necessary objections before the Sales Tax Officer and had a full opportunity to present its case. The court concluded that the petitioner was not prejudiced by the short notice period.

Conclusion:
The court dismissed the writ petition, finding no merit in any of the submissions made by the petitioner. The rectification order was upheld as valid, timely, and in accordance with the law, and the petitioner's objections regarding the adequacy of notice and natural justice were rejected. The petitioner was ordered to bear the costs.