1984 (12) TMI 289 - HC - VAT and Sales Tax

Summary

Issues:
1. Validity of circulars issued by the Commissioner of Sales Tax fixing the amount of security for proper use of forms under section 8-C(2) of the Uttar Pradesh Sales Tax Act, 1948.

Analysis:
The High Court of Allahabad considered the validity of circulars dated 11th October, 1983, 16th November, 1983, and 11th May, 1984, issued by the Commissioner of Sales Tax, U.P., regarding the amount of security to be furnished for proper use of forms under section 8-C(2) of the Act of 1948. The petitioners contended that the Commissioner exceeded his jurisdiction by fixing the amount of security, which, according to them, should be determined by the assessing authority as per the amended section 8-C(2). The Court noted that the amended section empowered the assessing authority to decide the security amount, not the Commissioner. The petitioners argued that the circulars substituted the assessing authority's discretion with the Commissioner's decision, contrary to the statutory provision. The Court referenced a Supreme Court decision to support the principle that the authority granted by law to determine certain matters cannot be exercised by another entity. It held that the discretion to fix the security amount was vested in the assessing authority by the amendment, and the Commissioner had no jurisdiction to issue circulars specifying the security amount.

The Court addressed the argument that a previous Division Bench decision upheld the validity of the circular dated 11th October, 1983, and emphasized that the amendment to section 8-C altered the statutory provision, granting discretion to the assessing authority. Referring to legal principles established in previous cases, the Court concluded that the earlier decision validating the circular had lost its efficacy due to the retrospective legislation. Therefore, the Court held that the circulars in question were in conflict with the statutory provision conferring discretion on the assessing authority and, hence, declared them invalid and quashed them. The Court clarified that the assessing authority should act in accordance with section 8-C(2) of the U.P. Sales Tax Act, 1948, and provided for the supply of the order copy to the parties' counsel.

In conclusion, the High Court of Allahabad ruled that the circulars issued by the Commissioner of Sales Tax fixing the security amount for proper use of forms were invalid and inoperative as they conflicted with the statutory provision granting discretion to the assessing authority. The Court emphasized the importance of adhering to the law's provisions and held that the Commissioner exceeded his jurisdiction by specifying the security amount. The judgment highlighted the significance of statutory amendments and their impact on previous decisions, ultimately quashing the circulars in question and directing compliance with the relevant legal provisions.