2001 (5) TMI 983 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Jurisdiction of the Revisional Authority under Section 40 of the Haryana General Sales Tax Act, 1973.
2. Time-barred notice for the assessment year 1985-86.
3. Error of law in the orders passed by the Revisional Authority and the Tribunal.
4. Consideration of the nature of operations undertaken by the petitioner in the assessment.

Detailed Analysis:

1. Jurisdiction of the Revisional Authority under Section 40 of the Haryana General Sales Tax Act, 1973:
The petitioner argued that the Revisional Authority (respondent No. 2) did not have jurisdiction under Section 40 of the Act to revise the assessment orders on the ground of escaped assessment. Section 31 of the Act covers reassessment of tax due to under-assessment or escaped assessment, which can only be exercised by the Assessing Authority within three years from the date of the final assessment order. The Revisional Authority's power under Section 40 is limited to ensuring the legality or propriety of any proceedings or orders and cannot be used to address escaped assessments. The court agreed with the petitioner, stating that the Legislature intended different authorities to handle different situations, and the Revisional Authority's power cannot be extended to deal with escaped assessments.

2. Time-barred notice for the assessment year 1985-86:
The petitioner contended that the notice issued by respondent No. 2 was time-barred for the assessment year 1985-86. The court did not explicitly address this issue separately but implicitly supported the petitioner's position by ruling that the notices issued under Section 40 were ultra vires.

3. Error of law in the orders passed by the Revisional Authority and the Tribunal:
The petitioner argued that the orders passed by respondent No. 2 and the Tribunal were vitiated by an error of law apparent on the face of the record because they failed to consider the petitioner's plea correctly. The court found that the Revisional Authority had issued notices mechanically and without proper reference to the relevant statutory provisions, indicating a lack of objective opinion formation. This mechanical issuance of notices was sufficient to conclude that the orders were ultra vires.

4. Consideration of the nature of operations undertaken by the petitioner in the assessment:
The petitioner asserted that the nature of its operations, involving hiring and service charges for tractors and other machinery with its own staff, did not constitute a "sale" under the Act. The court did not delve deeply into this issue, as it had already determined that the Revisional Authority lacked jurisdiction under Section 40 to address escaped assessments, rendering the orders invalid.

Conclusion:
The court held that the orders passed by respondent No. 2 were ultra vires to Section 40 of the Act and quashed them. Consequently, the appellate order passed by the Tribunal was also quashed. The court directed the respondents to refund any amount deposited by the petitioner in compliance with the impugned orders. The court did not find it necessary to address other grounds of challenge raised by the petitioner due to the conclusion on the primary jurisdictional issue.