1998 (8) TMI 520 - SC - VAT and Sales Tax

Whether the provisions of section 29-A of the Act as introduced by U.P. Act No. 20 of 1971 continued to be valid on the statute book? Held that - Appeal allowed. Incidence by itself can by no means be allowed to gather the impression that Annapurna Biscuit Manufacturing Co. s case 1973 (4) TMI 77 - SUPREME COURT OF INDIA was still surviving. That case as said before stands pro tanto overruled. It could not have been the basis to grant relief to the respondents by the High Court. Thus set aside the impugned orders of the High Court remitting the cases back to it for re-hearing of the writ petitions on points other than those which were based on Annapurna Biscuit Manufacturing Co. s case supra

Issues:
1. Validity of section 29-A of the Act challenged before the Court.
2. Substitution of section 29-A by U.P. Sales Tax (Amendment and Validation) Act, 1971.
3. Judgment of the Supreme Court in Kasturi Lal Harlal v. State of U.P.
4. Challenge of the validity of substituted section 29-A before the Court.
5. Decision in Annapurna Biscuits Manufacturing Company v. State of Uttar Pradesh.
6. Retroactive effect of subsequent judgments on prior decisions.
7. Interpretation of legal precedents and overruling of previous judgments.
8. Application of section 22 of the Act to rectify apparent mistakes in orders.
9. Review of judgment by the Supreme Court.
10. Effect of subsequent judgments on the validity of section 29-A of the Act.

1. Validity of section 29-A of the Act:
The judgment of the High Court of Allahabad discussed the challenge to the validity of section 29-A of the Act, which debarred refund to a dealer if the amount had been realized as tax from a customer. The provision was initially enacted in 1969 and upheld by the Supreme Court in Kasturi Lal Harlal v. State of U.P. The subsequent substitution of this section by the U.P. Sales Tax (Amendment and Validation) Act, 1971, was also highlighted.

2. Substitution of section 29-A by U.P. Sales Tax (Amendment and Validation) Act, 1971:
The original section 29-A was substituted by the U.P. Sales Tax (Amendment and Validation) Act, 1971, which introduced new procedures for the disbursement of amounts wrongly realized by dealers as tax. This substitution led to legal challenges regarding the legislative competence of the State of Uttar Pradesh.

3. Judgment of the Supreme Court in Kasturi Lal Harlal v. State of U.P.:
The judgment in Kasturi Lal Harlal v. State of U.P. upheld the constitutionality of section 29-A of the Act. The subsequent appeal in the Supreme Court reaffirmed the validity of the provision, emphasizing its importance in tax refund matters.

4. Challenge of the validity of substituted section 29-A before the Court:
The Full Bench of the Court in Annapurna Biscuits Manufacturing Company v. State of Uttar Pradesh declared the substituted section 29-A invalid, citing legislative overreach. This decision was further upheld by the Supreme Court, emphasizing the limits of state legislative powers.

5. Decision in Annapurna Biscuits Manufacturing Company v. State of Uttar Pradesh:
The judgment in Annapurna Biscuits Manufacturing Company v. State of Uttar Pradesh played a crucial role in challenging the validity of section 29-A, highlighting the importance of legal precedents in shaping subsequent legal interpretations.

6. Retroactive effect of subsequent judgments on prior decisions:
The discussion revolved around the retroactive effect of subsequent judgments on prior decisions, particularly in the context of overruling previous judgments by higher courts. The impact of such overruling on the legal landscape was a key point of contention.

7. Interpretation of legal precedents and overruling of previous judgments:
The Court analyzed the interpretation of legal precedents and the overruling of previous judgments, emphasizing the need for consistency and finality in legal decisions to maintain the integrity of the judicial system.

8. Application of section 22 of the Act to rectify apparent mistakes in orders:
The application of section 22 of the Act to rectify apparent mistakes in orders was discussed, highlighting the criteria for correcting errors and the need for clear and explicit grounds for such rectifications.

9. Review of judgment by the Supreme Court:
The possibility of reviewing judgments by the Supreme Court was considered in light of conflicting interpretations and subsequent legal developments, underscoring the importance of legal clarity and consistency in decision-making.

10. Effect of subsequent judgments on the validity of section 29-A of the Act:
The effect of subsequent judgments on the validity of section 29-A of the Act was a central issue, with arguments presented regarding the impact of evolving legal interpretations on the enforceability of specific statutory provisions.

This detailed analysis of the judgment provides a comprehensive overview of the legal issues involved, the historical context of legislative amendments, and the judicial interpretations that shaped the final decision of the Court.

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