1982 (2) TMI 282 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Jurisdiction of the Sales Tax Officer under Section 22 and Rule 41(8).
2. Validity of demands raised under Section 22 and Rule 41(8).
3. Appropriate remedy for the petitioners.
4. Timeliness and procedural aspects of filing an appeal.

Issue-wise Detailed Analysis:

1. Jurisdiction of the Sales Tax Officer under Section 22 and Rule 41(8):
The primary issue was whether the Sales Tax Officer had the jurisdiction to initiate proceedings under Section 22 of the U.P. Sales Tax Act and to pass orders under Rule 41(8) read with Section 8(8). Section 22 empowers the assessing, appellate, or revising authority to rectify any mistake apparent on the record within three years from the date of the order sought to be rectified. The court noted that the term "record" includes the entire evidence on the assessment file, not just the assessment order. The Sales Tax Officer discovered that treasury chalans credited to the petitioners were not entered in the treasury records or the departmental register. This discrepancy gave the Sales Tax Officer the jurisdiction to initiate proceedings under Section 22.

2. Validity of demands raised under Section 22 and Rule 41(8):
The court refrained from expressing an opinion on the correctness of the orders passed under Section 22 and Rule 41(8), stating that the Sales Tax Officer had the initial jurisdiction to initiate proceedings under Section 22. The court also discussed Rule 41(8), which comes into play after the assessment is made and allows for the realization or refund of the difference between the assessed tax and the deposited amount. The court clarified that the power under Rule 41(8) and Section 8(8) is not affected even if the limitation for rectification under Section 22 had expired.

3. Appropriate remedy for the petitioners:
The petitioners contended that the orders under Section 22 and Rule 41(8) were without jurisdiction and thus unenforceable. The court considered whether to examine the orders on merits or to direct the petitioners to file an appeal or a civil suit. The court referred to the Supreme Court's decision in Karam Chand Thapar and Brothers Ltd. v. State of Uttar Pradesh, suggesting that a rectification order under Section 22 is appealable under Section 9. The court concluded that the petitioners could challenge the orders by filing a suit or an appeal under Section 9, as the case involved highly disputed questions of fact that could not be fairly decided in proceedings under Article 226 of the Constitution.

4. Timeliness and procedural aspects of filing an appeal:
The petitioners argued that the petitions should not be dismissed on the ground of an alternative remedy at the final hearing stage. The court acknowledged the principle from L. Hirday Narain v. Income-tax Officer, Bareilly, that a writ petition should not be dismissed solely because the statutory remedy was not availed of. However, the court emphasized that the case involved controversial questions of fact, making it unsuitable for decision under Article 226. The court directed the appellate authority to condone the delay in filing appeals due to the pendency of the writ petitions, ensuring that the petitioners could pursue their appeals without being time-barred.

Conclusion:
The court dismissed the petitions, stating that the disputed questions of fact could not be satisfactorily decided under Article 226 of the Constitution. The court directed the appellate authority to condone the delay in filing appeals and granted credit for the time spent prosecuting the petitions. The stay order was discharged, and there was no order as to costs.