1967 (2) TMI 82 - HC - VAT and Sales Tax

Summary

Issues:
1. Incorrect imposition of sales tax on turnover entitled to exemption.
2. Refusal to entertain plea for exemption by Deputy Commissioner.
3. Dismissal of appeal by Sales Tax Appellate Tribunal.
4. Correctness of taxing authorities' actions.

Detailed Analysis:
1. The petitioner, a cloth dealer, reported a gross turnover for the financial year 1958-59, with only a portion liable to tax. The Commercial Tax Officer accepted the net taxable turnover but imposed tax incorrectly. The petitioner appealed, arguing that a portion of the turnover was exempt under entry 8A of the Fifth Schedule. The Deputy Commissioner rejected this plea, citing failure to raise the issue before the assessing authority.

2. The petitioner then appealed to the Sales Tax Appellate Tribunal, which summarily dismissed the appeal due to lack of evidence supporting the exemption claim. The Tribunal upheld the previous decisions, emphasizing the absence of proof for the contention raised by the petitioner.

3. The High Court found the actions of the taxing authorities to be incorrect and not in accordance with the law. It noted that the bulk of the petitioner's turnover was not taxable, as textiles were exempt from sales tax during the relevant period. The Court criticized the authorities for failing to grant the benefit of exemption based on true facts, even if the petitioner had not initially claimed it. The Court emphasized that it was the duty of assessing and appellate authorities to correct obvious mistakes, especially when the law was clear and facts were undisputed.

4. The High Court allowed the revision petition, setting aside the orders of the Tribunal and the first appellate authority. The assessment order imposing tax on the exempt turnover was also annulled, with directions for the refund of the tax amount. The Court awarded costs to the petitioner and highlighted the duty of authorities to ensure correct application of tax laws and provisions, especially in cases where exemptions are clearly applicable.