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1979 (12) TMI 142 - HC - VAT and Sales Tax
Issues Involved:
1. Jurisdiction of the Commercial Tax Officer to issue notices for assessment of sales tax after the death of the retail dealer. 2. Interpretation of sub-section (4) of section 10 of the Bengal Motor Spirit Sales Taxation Act, 1941, regarding the liability of legal representatives for unpaid taxes. 3. Validity of notices issued for periods during which the deceased retail dealer was alive. Issue-wise Detailed Analysis: 1. Jurisdiction of the Commercial Tax Officer to issue notices for assessment of sales tax after the death of the retail dealer: The appellants challenged the jurisdiction of the Commercial Tax Officer (respondent No. 1) to issue notices for the assessment of sales tax after the death of the retail dealer, Sambhu Charan Sen. The learned single Judge had previously overruled this contention, interpreting sub-section (4) of section 10 of the Bengal Motor Spirit Sales Taxation Act, 1941, to mean that the respondent had jurisdiction. However, the appellants argued that the Act does not provide for the assessment of legal heirs for sales tax payable by the deceased retail dealer. 2. Interpretation of sub-section (4) of section 10 of the Bengal Motor Spirit Sales Taxation Act, 1941, regarding the liability of legal representatives for unpaid taxes: The key issue was the interpretation of sub-section (4) of section 10, which states that when the ownership of a business in motor spirit is transferred, any unpaid tax payable by the retail dealer at the time of the transfer shall be payable by the transferee. The appellants contended that this provision does not allow for the assessment of sales tax after the death of the retail dealer. They emphasized the phrase "which remains unpaid at the time of the transfer," arguing that no tax can be considered "unpaid" until it has been quantified through assessment. The court agreed with this interpretation, stating that the Act does not provide for the assessment of legal representatives of the deceased retail dealer. 3. Validity of notices issued for periods during which the deceased retail dealer was alive: The court examined the validity of the notices issued for the periods during which Sambhu Charan Sen was alive. It was noted that the assessment could not be made during his lifetime, and the proviso to section 7(1) requires giving the retail dealer an opportunity to be heard before determining the amount of tax due. Since Sambhu Charan Sen had died, it was impossible to comply with this mandatory requirement. The court concluded that the notices issued for periods during which he was alive were invalid, as the appellants could not be substituted for the deceased retail dealer for the purpose of assessment. Conclusion: The court held that the impugned notices for the periods during which Sambhu Charan Sen was alive were invalid. However, the notices for the periods after his death were deemed legal and valid. The judgment of the learned single Judge was modified to reflect this distinction. The appeals were allowed in part, with no order for costs. The court also directed that a certificate for appeal to the Supreme Court be issued, as the case involved substantial questions of law of general importance. The operation of the judgment was stayed for four weeks after the Christmas vacation, and the interim order granted by the court would continue during this period.
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