2002 (3) TMI 943 - HC - VAT and Sales Tax

Summary

Issues:
Challenge to Tribunal's order dated 30-11-1999 under U.P Trade Tax Act for assessment years 1987-88 and 1988-89. Validity of notice under Section 21, legality of proceedings, remand by Tribunal, jurisdictional errors, and fundamental defects.

Analysis:
The petitioner challenged the Tribunal's order dated 30-11-1999 under the U.P Trade Tax Act for the assessment years 1987-88 and 1988-89. The petitioner contended that the notice under Section 21 was not validly served upon them, leading to jurisdictional errors. The 1st appellate authority set aside the assessment order based on the insufficient service of notice under Section 21, citing legal precedents. The Commissioner Salex Tax filed second appeals against this decision before the Trade Tax Tribunal, leading to the petitioner's awareness of the matter upon being served the order on 13-12-2000.

The key contention was that the Tribunal erred in remanding the case to the Assessing Officer for issuing a fresh notice under Section 21, despite acknowledging the invalidity of the previous notice. The petitioner argued that the proceedings were without jurisdiction due to the expired limitation period under Section 21(2), and the fundamental defect could not be cured by a fresh notice. The questions of law raised focused on the necessity of valid notice under Section 21 as a condition precedent to proceedings, emphasizing that participation in proceedings does not validate an improperly served notice.

Legal authorities were cited to support the importance of strict compliance with notice requirements under Section 21. The Full Bench decision highlighted that the service of notice is a jurisdictional requirement, and the initiation of proceedings without valid notice renders them illegal and void. The Supreme Court's stance on the validity of notice and assessment further reinforced the significance of proper notice in tax proceedings.

Ultimately, the Court ruled in favor of the petitioner, emphasizing that the initiation of proceedings without valid notice was without jurisdiction. The Tribunal's decision to remand the case for a fresh notice was deemed unjustified, as the fundamental defect of improper notice could not be rectified by subsequent actions. The Court affirmed that the petitioner's revisions succeeded based on the lack of proper notice service, rendering the proceedings invalid and not curable by the petitioner's participation.