1987 (6) TMI 374 - HC - VAT and Sales Tax

Summary

Issues:
1. Assessment of sales tax on a dissolved firm under the Kerala General Sales Tax Act, 1963.
2. Validity of assessment proceedings under the old Act pending at the time of the new Act coming into force.

Analysis:
1. The case involved the assessment of sales tax on a dissolved firm for the assessment year 1957-58. The Revenue contended that the firm was constituted on 2nd December, 1957, and stood dissolved with effect from 12th November, 1958. The Appellate Tribunal ordered a remit to investigate the dissolution of the firm. The Sales Tax Officer subsequently passed a fresh assessment order, holding that there was no bar to continuing the proceedings under section 61 of the Kerala General Sales Tax Act, 1963. The Appellate Tribunal, however, nullified the assessment order, stating that it was made under the old Act which did not permit assessment on a dissolved firm. The Tribunal distinguished a previous decision and held the assessment void. The Revenue appealed in revision challenging this decision.

2. The High Court found that the approach and conclusion of the Appellate Tribunal were incorrect. The Tribunal had reasoned that since the assessment proceedings were initiated and completed under the old Act, there was no question of continuation under the new Act. However, the Court clarified that assessment proceedings continue until a final order is made, even if the original assessment was under the old Act. The Court highlighted that the assessment proceedings were pending when the new Act came into force, as there was a remit order and the final assessment was pending. The Court criticized the Tribunal for not considering the legal principle established by the Supreme Court in a relevant case. Consequently, the High Court set aside the Tribunal's order and restored the order passed by the Deputy Commissioner (Appeals).

In conclusion, the High Court allowed the petition, emphasizing that the assessment proceedings were still pending when the new Act came into force, and the Tribunal's decision to nullify the assessment order on the dissolved firm was erroneous. The Court reinstated the order of the Deputy Commissioner (Appeals) as valid.