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1973 (11) TMI 85
Issues Involved:
1. Jurisdiction of a judge appointed under Article 224A of the Constitution to try an election petition under Section 80A of the Representation of the People Act, 1951.
2. Authority of the Chief Justice to reallocate an election petition from one judge to another after the trial has commenced.
Issue-wise Detailed Analysis:
1. Jurisdiction of a judge appointed under Article 224A:
The primary question was whether a person sitting and acting as a judge of the High Court under Article 224A of the Constitution can exercise the jurisdiction to try an election petition under Section 80A of the Representation of the People Act, 1951. The court examined the language of Article 224A, which allows the Chief Justice of a High Court, with the previous consent of the President, to request any person who has held the office of a judge of that or any other High Court to sit and act as a judge of the High Court for that State. Such a person, while sitting and acting, has all the jurisdiction, powers, and privileges of a judge of the High Court but shall not otherwise be deemed to be a judge of that High Court.
The court concluded that the words "while so sitting and acting" indicate that the person has the jurisdiction, powers, and privileges of a judge of the High Court during the period they are requested to sit and act. The phrase "but shall not otherwise be deemed to be a judge of that High Court" implies that for purposes other than jurisdiction, powers, and privileges, the person requested is not considered a judge of that Court. Therefore, for the purpose of exercising jurisdiction under Section 80A of the Act, a person appointed under Article 224A is considered a judge of the High Court.
2. Authority of the Chief Justice to reallocate an election petition:
The second issue was whether the Chief Justice could reallocate an election petition from one judge to another after the trial had commenced. The court noted that after the initial allocation of the election petition to Vyas J., the Chief Justice directed Vyas J. to sit on the Gwalior Bench, and Vyas J. himself requested that the election petition be heard by someone at Indore to avoid his visits and ensure early disposal. The Chief Justice subsequently entrusted the election petition to Surajbhan J.
The court found no legal infirmity in the Chief Justice's order reallocating the election petition. There is nothing in Section 80A of the Act or any other provision preventing the Chief Justice from relieving a judge from the task of trying an election petition upon the judge's request. The court referred to the case of Zikar v. The State, which held that the Chief Justice has no power to withdraw and transfer a case from a division bench without concurrence but did not indicate that the Chief Justice is powerless to withdraw a case from a judge upon the judge's request.
Conclusion:
The court concluded that a person requested to sit and act as a judge under Article 224A is a judge of the High Court for the purpose of Section 80A of the Act. Additionally, the Chief Justice has the authority to reallocate an election petition from one judge to another, especially upon the request of the judge initially assigned. However, in the interest of justice, the court directed that the election petition be tried by a permanent judge of the High Court assigned by the Chief Justice, setting aside the previous order dated August 20, 1973. The appeal was allowed, and the parties were directed to bear their own costs.
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1973 (11) TMI 84
Issues Involved:
1. Determination of seniority of Mamlatdars/Tehsildars.
2. Validity of the Rules of 30th July, 1959 under the proviso to Section 115(7) of the States Reorganisation Act, 1956.
3. Constitutionality of the procedure for promotions to the posts of Deputy Collector.
Issue-wise Detailed Analysis:
Re. Ground A: Determination of Seniority of Mamlatdars/Tehsildars
The petitioners argued that their seniority should be determined according to the Government Resolution dated 21st November, 1941, rather than the Government Resolution dated 29th July, 1963. However, the court found this argument difficult to comprehend, noting that the inter se seniority of Tehsildars and Mamlatdars allocated from various states to the reorganised State of Bombay as on 1st November, 1956, would be governed by Rules 7, 8, and 9 of the Rules of 1957. Therefore, neither the Government Resolution dated 21st November, 1941, nor the Government Resolution dated 29th July, 1963, would apply. Consequently, Prayer II of the petition was rejected.
Re. Ground B: Validity of the Rules of 30th July, 1959
The petitioners contended that the Rules of 30th July, 1959, which limited promotions to 50% of the vacancies and made them on a divisional basis, varied their conditions of service to their disadvantage without the previous approval of the Central Government, as required under the proviso to Section 115(7) of the States Reorganisation Act, 1956. The court, however, found that the reduction in chances of promotion did not constitute a variation in conditions of service. Citing the decision in State of Mysore v. G. B Purohit, the court held that mere chances of promotion are not conditions of service. Hence, the Rules of 30th July, 1959, were not invalid for non-compliance with the proviso to Section 115(7). Regarding the second proviso to Rule 1 of these Rules, the court agreed with the Bombay High Court's declaration of its invalidity, as it discriminated between directly recruited Mamlatdars and promotee Mamlatdars, violating Article 16 of the Constitution.
Re. Ground C: Constitutionality of the Procedure for Promotions
The court examined whether the cadre of Mamlatdars in the reorganised State of Bombay was a State cadre or a divisional cadre. It was found that while the cadre of Mamlatdars in the former State of Hyderabad was a State cadre, the cadre in the former State of Bombay was a divisional cadre. The State Government, by a resolution dated 1st November, 1956, decided that the cadre of Mamlatdars would be divisional. The court noted that the Rules of 19th November, 1959, provided legislative recognition for divisional cadres of Mamlatdars.
The court then scrutinized the procedure for promotions to the State cadre of Deputy Collectors, finding it violative of Article 16 of the Constitution. The procedure involved promotions on a divisional basis, which denied equal opportunity to Mamlatdars from different divisions. The court emphasized that promotions to a State cadre should be made on a statewide basis to ensure equal opportunity.
The court rejected the respondents' reliance on the decision in Ram Saran v. Deputy Inspector General of Police, distinguishing it on the grounds that in Ram Saran's case, promotions were made within a range for a range cadre, whereas in the present case, promotions to a State cadre were made on a divisional basis.
Conclusion:
The court held that the second proviso to Rule 1 of the Rules of 30th July, 1959, was void as it violated Article 16 of the Constitution. The procedure for promotions to the cadre of Deputy Collectors followed by the State Government was declared invalid for denying equality of opportunity. The Government Resolution dated 7th April, 1961, was quashed. The State Government was directed to readjust promotions and confirmations in light of the principles laid down in the judgment, with retrospective effect but without arrears of pay and allowances for the period prior to the filing of the petition. The petitioners were awarded costs.
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1973 (11) TMI 83
Issues:
Challenge to notice of demand under Produce Cess Act 1966 without proper assessment and notice as per Rule 5.
Analysis:
The petitioner, a partner in a business, sought to quash a notice of demand under the Produce Cess Act 1966 for payment of a specified amount. The Act imposes a duty of excise on certain produce, including oils extracted from oil-seeds. The Act requires every occupier of a mill to furnish monthly returns on the produce consumed or extracted. Failure to furnish a return or furnishing a defective return allows the Collector to assess the amount payable. The Act also provides for appeal against assessments within three months. The Produce Cess Rules 1969 prescribe the content of the notice of demand, including details of the produce consumed, cess assessed, amount paid, and amount due.
The petitioner contended that the demand notice was issued without proper assessment, hindering the right to appeal as per Section 10 of the Act. The Court noted that the notice under Section 9(1) of the Act, as per Rule 5, should contain specific details for the petitioner to challenge its correctness through an appeal. As the notice did not comply with Rule 5 by not providing the necessary particulars, the Court allowed the writ petition and quashed the demand notice. The judgment clarified that the first respondent could proceed afresh in compliance with the law. The decision emphasized the importance of following procedural requirements in issuing demand notices under the Act to safeguard the rights of the parties involved.
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1973 (11) TMI 82
Contraction of a contract - why the Legislature can and often does, avoid such an anomalous consequence by enacting in the temporary statute a saving provision, the effect of which is in some res- pects similar to that of s. 6 of the General Clauses Act?
Held that:- The argument of any vested right in the defendant being taken away does not hold good; nor is there any foundation for the contention that the later Act is being applied retrospectively. All that we hold is (a) that a disability of the plaintiff to enforce his cause of action under the ordinary law may not necessarily be transmuted into a substantive right in the defendant, (b) that rights of a statutory tenant created under a temporary statute, as in this case, go to the extent of merely preventing the eviction so long as the temporary statute lasts, (c) that the provisions of s. 43 do not preserve, subsequent to repeal, any right to rebuff the plaintiff's claim for, eviction and (d) that S. 6 of the General Clauses Act does not justify anything longer or for any time longer than s. 2 of the Act confers or lasts.
It-is appropriate for a Court to do justice between parties to the litigation and in moulding the relief in the light of the subsequent developments, to take note of legislative changes. A court of justice should, if it could, adjudicate finally and not leave the door ajar for parties to litigate again. In the present case, it is not seriously disputed that if the plaintiff were to sue for recovery of possession today, the Rent Control Law does not stand in the way. Therefore, it is manifestly a measure of doing justice between the parties and ending litigation which has seen two decades pass, to conclude it here by taking cognizance and adjusting the relief in the light of the later Act and repeal of the earlier Act. Nevertheless, it is contended that the present suit cannot be decreed in view of the provisions of the U. P Public Premises (Eviction of Unauthorised Occupants) Act, 1972. This statute 'which provides for summary eviction of unauthorised occupants cannot obstruct the suit for eviction of a tenant. The far-fetched submission has hardly any substance and we reject it.
In the result, C.A. 1727 of 1968 is dismissed and C.A. No. 1728 of 1968 is allowed.
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1973 (11) TMI 81
Issues:
Claim for recovery of excess Central Excise duty paid for purchase of furnace oil.
Entitlement to refund of excise duty paid in 1963.
Validity of claim against Union of India and Collector of Customs.
Compliance with Central Excise Rules for refund eligibility.
Amendment of plaint to claim relief against defendant No. 3.
Analysis:
The plaintiff, a company, filed a suit against Union of India and Collector of Customs for recovery of excess Central Excise duty paid for purchasing furnace oil. The plaintiff contended that it was entitled to purchase oil free of excise duty under a license but had paid sums of money as duty to the seller, defendant No. 3. The plaintiff sought a refund from defendants 1 and 2, who had collected the duty from defendant No. 3. The court noted that the plaintiff's claim for the amount paid in January 1964 was not valid as the license exemption had expired in 1963, making the plaintiff ineligible for a refund for purchases made in 1964.
Regarding the claim for the amount paid in December 1963, the court analyzed the provisions of the Central Excises and Salt Act and ruled that the plaintiff, not being a manufacturer or producer, had no direct obligation to pay excise duty to the Union of India. The court held that the plaintiff's claim for refund should be against defendant No. 3, the recipient of the duty, rather than against the Union of India or the Collector of Customs. The court emphasized that the plaintiff's failure to make a claim within the stipulated three-month period under Rule 11 of the Central Excise Rules further weakened the refund claim against defendant No. 1.
Moreover, the court highlighted the plaintiff's non-compliance with rules 192 to 194 of the Central Excise Rules, which required submission of monthly reports on excisable goods obtained under a concessional rate license. The court found that the plaintiff had not provided sufficient evidence of compliance with these rules, which were essential for claiming concessions and refunds. The court concluded that the plaintiff had no enforceable claim against defendants 1 and 2, emphasizing that any right for a refund would lie against defendant No. 3.
The court rejected the plaintiff's request to amend the plaint to claim relief against defendant No. 3, stating that such an amendment would alter the character of the suit. Ultimately, the court allowed the appeal by Union of India and Collector of Customs, setting aside the lower court's judgment and decree without awarding costs.
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1973 (11) TMI 80
Whether the petitioner was appointed to the substantive post of Chief Secretary to the state ate of Tamil Nadu?
Held that:- In the present case, it appears that the petitioner gave advice in course of duty. The Government practically in all cases accepted the advice of the petitioner. There does not appear any instance of acrimony or disagreement between the Government and the petitioner. There are no records to suggest that the petitioner advised one way and the Government acted in an opposite manner. The events alleged at the time of the elections are in aid of the petitioner's contention that his dealing of the law and order situation was so firm that the Chief Minister and other members of his party became alienated. The petitioner suggested that the Chief Minister and the members of his party were responsible for introducing violence and intimidation. The further suggestion of the petitioner is that the petitioner exposed the activities of the D.M.K. Party. Complaints against the D.M.K. Party were like complaints against other political parties. The affidavit evidence, indicates that the law and order situation was kept under normal'control. All the officers of the State including the police service discharged, their duty in the best interest of administration 'as also 'in public interest. The petitioner did not achieve anything extraordinary. As the Chief Secretary it was the duty of the petitioner to see that situation nowhere went out of control. The Chief Minister and the members of his party cannot be said on the affidavit evidence to have committed acts of violence or intimidation. The entire affidavit evidence establishes beyond any measure of doubt that the petitioner's allegations imputing malafides against the Chief Minister are baseless. The petitioner's allegations were in aid of suggesting vindictiveness and vengeance on part of the Chief 'Minister Facts' and circumstances repel any such insinuation and innuendo.
For these reasons the contentions of the petitioner fail. The petition is dismissed.
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1973 (11) TMI 79
Issues Involved:
1. Validity of Section 6 and Section 6-A of the Mysore Sales Tax Act, 1957.
2. Interpretation and application of Section 6 and Section 6-A of the Act.
3. Burden of proof under Section 6-A.
4. Legality of assessment orders without proposition notices.
5. Availability of statutory remedies and appellate procedures.
Detailed Analysis:
1. Validity of Section 6 and Section 6-A of the Mysore Sales Tax Act, 1957:
The petitioners challenged the validity of Section 6 and Section 6-A of the Act. However, during the proceedings, the petitioners' counsel conceded that if Sections 6 and 6-A are properly construed, it would not be necessary to question their validity. Consequently, the court focused on interpreting these sections rather than examining their constitutionality. The challenge to the validity of Section 6-A(1) was ultimately dismissed, and the petitioners did not press their contention regarding the validity of Section 6.
2. Interpretation and Application of Section 6 and Section 6-A of the Act:
The court examined the relevant provisions of the Act to ascertain their true meaning and effect. Section 6 was identified as a charging section, imposing tax under specific conditions. The conditions for tax liability under Section 6 include:
- The dealer must purchase taxable goods in the course of business.
- The purchase must occur in circumstances where no tax is leviable at the sale point under Section 5.
- The dealer must either consume the goods in manufacturing, dispose of them in a manner other than sale within the state, or dispatch them outside the state except in inter-State trade or commerce.
The proviso to Section 6 exempts certain transactions from tax, specifically sales or purchases of goods specified in the Fourth Schedule and goods in the Second Schedule already taxed under Section 5(3)(a).
3. Burden of Proof under Section 6-A:
Section 6-A(1) places the burden of proving that any transaction or turnover is not liable to tax on the dealer. The court clarified that this burden pertains to cases where the dealer claims exemption from tax. The taxing authority bears the burden of proving the necessary ingredients for taxation. The court referenced the Supreme Court's decision in Deputy Commissioner of Agricultural Income-tax and Sales Tax, Quilon v. Travancore Rubber and Tea Co., affirming that the burden of proving tax liability lies on the taxing authority.
4. Legality of Assessment Orders without Proposition Notices:
In Writ Petition No. 2041 of 1972, the petitioner challenged an assessment order made without a proposition notice. The court found that the Commercial Tax Officer failed to issue a proposition notice and did not record clear findings establishing tax liability under Section 6. Consequently, the court quashed the assessment order, allowing the Commercial Tax Officer to make a fresh assessment after issuing an appropriate proposition notice.
5. Availability of Statutory Remedies and Appellate Procedures:
For petitioners in other writ petitions challenging assessment orders made after issuing proposition notices, the court noted that they had statutory remedies available through appeals. Since the petitioners could not challenge the validity of Sections 6 and 6-A before the appellate authority, they approached the court. With the challenge to Section 6-A(1) failing and the petitioners not pressing their contentions regarding Section 6, the court dismissed these writ petitions, directing the petitioners to pursue their appellate remedies within 30 days.
Conclusion:
The court's judgment provided a detailed interpretation of Sections 6 and 6-A of the Mysore Sales Tax Act, 1957, clarified the burden of proof in tax liability cases, and addressed the legality of assessment orders issued without proposition notices. The court also emphasized the availability of statutory remedies and directed petitioners to pursue appellate procedures where applicable.
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1973 (11) TMI 78
Issues:
Levy and collection of purchase tax on dried coconuts derived from tax-paid watery coconuts, entitlement to refund of tax paid on watery coconuts, interpretation of proviso in Andhra Pradesh General Sales Tax Act.
Analysis:
The petitioners, dealers in dry coconuts, sought a writ to declare the levy and collection of purchase tax on dried coconuts derived from tax-paid watery coconuts as unauthorized. The tax was paid by vendors on watery coconuts, and the petitioners argued that since tax was already paid on watery coconuts, dry coconuts made from them should not be taxed. They requested a refund of the tax paid on watery coconuts for the assessment years 1967-68 to 1970-71. The court noted a delay in filing the writ petition for the earlier years but decided to consider all years due to the same legal principle applying.
The court analyzed the proviso introduced by the Andhra Pradesh General Sales Tax (Amendment) Act, which stated that tax collected on watery coconuts should be refunded if tax was also collected on coconuts made from them. The proviso did not specify the recipient of the refund, but the court interpreted it to refer to the person on whom the tax was levied and collected, i.e., the vendors who paid tax on watery coconuts. The court emphasized that the tax on watery coconuts should be refunded to those who paid it, not to the dealers in dry coconuts. The proviso clearly indicated that tax on watery coconuts should be refunded, and since the petitioners were not the ones taxed on watery coconuts, they were not entitled to the refund. Therefore, the court dismissed the writ petition, stating that the petitioners, as dealers in dry coconuts, were not the entitled recipients of the tax refund on watery coconuts.
In conclusion, the court held that the proviso in the Act entitled only those who were taxed on watery coconuts to claim a refund, not the dealers in dry coconuts. The court's interpretation focused on the specific language of the proviso, emphasizing that the tax on watery coconuts should be refunded to the vendors who paid it. Consequently, the court dismissed the writ petition, ruling in favor of the respondents and ordering the petitioners to pay costs.
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1973 (11) TMI 77
Issues:
1. Refund of tax under Central Sales Tax Act.
2. Validity of assessments under Orissa Sales Tax Act.
3. Interpretation of provisions of Central Sales Tax Act.
4. Application of amendments in Central Sales Tax Act.
5. Claim for refund based on amendments.
6. Dispute regarding collection of tax.
7. Justification for rejecting application for refund.
Analysis:
1. The petitioner, a registered dealer under the Central Sales Tax Act, sought a refund of tax amounting to Rs. 27,971.59 for the period from 1962-63 to 1967-68. The application for refund was rejected by the Sales Tax Officer, leading to a writ application to quash the rejection order and request the refund. The petitioner also prayed for quashing the assessments for the mentioned years. An amendment was allowed for quashing the assessments, despite the original petition already containing such a prayer.
2. The petitioner argued that as per section 9(3) of the Central Sales Tax Act, since tax at the purchase point had already been paid under the Orissa Sales Tax Act for the sale of jute and broomstick, there was no need for levying Central sales tax on the turnover. The petitioner relied on Supreme Court decisions to support its contention. The amended Central Sales Tax Act provisions were crucial for the case.
3. The assessments were deemed valid under section 9 of the amended Act, and the petitioner's request to quash the assessments was disallowed, especially since the validity of the amending Act was not challenged. The interpretation and application of the provisions played a significant role in this decision.
4. The petitioner's claim for refund was subject to examination, with the argument that if covered by section 10(1) of the amending Act, the claim would be admissible despite the assessments being validated. The conditions for refund eligibility were to be satisfied.
5. The standing counsel argued against the refund claim, stating that where the tax liability had been cleared, there was no basis for a refund. However, the court disagreed, emphasizing that if taxes were paid in excess due to a mistake of law, a refund claim would be maintainable. The principle of refund in such cases was acknowledged.
6. A dispute arose regarding whether the tax had been collected by the petitioner, with conflicting claims from both parties. The question of whether tax collection had occurred was deemed a factual matter requiring further investigation beyond the scope of the current proceeding.
7. The justification provided by the assessing officer for rejecting the refund application was found to be unjustified, leading to the quashing of the rejection order. The court directed the officer to reconsider the refund application in light of the amending Act's provisions and provide the petitioner with an opportunity to substantiate its contentions on factual matters.
8. The writ application was partly allowed by quashing the rejection order and instructing the assessing officer to review the refund application. No costs were awarded in this decision, with agreement from both judges on the outcome.
This detailed analysis of the judgment highlights the key legal issues, arguments presented, interpretations of relevant statutes, and the court's decision on each aspect of the case.
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1973 (11) TMI 76
Issues Involved:
1. Whether the sales by the assessee to M.M.T.C. were in the course of export and thus exempt from tax under Article 286(1)(b) of the Constitution.
2. Whether the sales were intra-State sales within Mysore and not subject to tax under the Central Sales Tax Act, 1956.
Issue-wise Detailed Analysis:
1. Exemption from Tax Under Article 286(1)(b):
The primary contention of the assessee was that the sales to M.M.T.C. were in the course of export and thus exempt from tax under Article 286(1)(b) of the Constitution. The judgment emphasized that to qualify as a sale in the course of export, the sale must either occasion the export or be effected by a transfer of documents of title to the goods after the goods have crossed the customs frontiers of India, as per Section 5(1) of the Central Sales Tax Act, 1956.
The court referred to the Supreme Court's interpretation in State of Travancore-Cochin v. Bombay Co. Ltd. and State of Travancore-Cochin v. S.V.C. Factory, which clarified that a sale by export involves a series of integrated activities from the agreement of sale with a foreign buyer to the delivery of goods to a common carrier for transport out of the country. The court also cited the Supreme Court's decision in Coffee Board v. Joint Commercial Tax Officer, which held that a sale in the course of export must be a single sale causing the export, with no room for intermediary sales.
In this case, the assessee's sales to M.M.T.C. were not pursuant to any agreement with a foreign importer but were internal sales to M.M.T.C., which had the license to export. Thus, there were two distinct sales: one from the assessee to M.M.T.C. and another from M.M.T.C. to the foreign buyer. The court concluded that only the second sale by M.M.T.C. qualified for exemption under Article 286(1)(b).
The court examined the terms of the contract, noting that it was a f.o.r. contract, with the railway receipts taken in M.M.T.C.'s name and payment obtained against the "payment copy" of the R/R. Under Section 23(1) of the Sale of Goods Act, the property in the goods passed to the buyer when the goods were unconditionally appropriated to the contract. In this case, the goods were appropriated when loaded into railway wagons in Mysore State, long before entering the export stream.
The court dismissed the argument that the final settlement of accounts and the right of M.M.T.C. to reject consignments linked the sale to export. It found that the final analysis and rejection rights pertained to the shipment stage at Cuddalore, not the foreign port.
2. Nature of Sales - Inter-State vs. Intra-State:
The alternative contention was that the sales were intra-State within Mysore and not subject to inter-State tax. The court highlighted that the contract required the ore to be loaded into railway wagons at Papinaikanahalli in Mysore for transmission to Cuddalore in Tamil Nadu. The contract also stipulated shared charges for weighment, sampling, and analysis at Cuddalore, indicating the movement of goods across state lines.
Thus, the sales were deemed inter-State sales, attracting tax under the Central Sales Tax Act, 1956.
Conclusion:
The court upheld the Commissioner's view that the sales by the assessee to M.M.T.C. were not in the course of export and were inter-State sales subject to tax. Consequently, the appeal was dismissed with costs.
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1973 (11) TMI 75
Issues Involved:
1. Whether the assessment order for the year 1952-53 was barred by limitation.
2. Whether the Judge (Revisions), Sales Tax, qualifies as a "civil or other competent court" under the explanation to section 21(2) of the U.P. Sales Tax Act.
Detailed Analysis:
1. Whether the assessment order for the year 1952-53 was barred by limitation:
The assessee, a partnership firm dealing in bullion and ornaments, was assessed for the year 1952-53 by the Sales Tax Officer, Varanasi, on 23rd June, 1962. According to section 21(2) of the U.P. Sales Tax Act, no assessment order could be made after four years from the end of the relevant year. However, the explanation to section 21(2) allowed for the exclusion of any period during which the assessment proceedings were stayed by a court order. The assessment proceedings were stayed multiple times: once by the High Court from 22nd July, 1954, to 30th April, 1959, and again by the Judge (Revisions), Sales Tax, from 16th December, 1960, to 23rd January, 1961, with the order vacating the stay being communicated on 7th May, 1961. The appellate authority and the additional revising authority held that these periods should be excluded, making the assessment on 23rd June, 1962, within the limitation period.
2. Whether the Judge (Revisions), Sales Tax, qualifies as a "civil or other competent court" under the explanation to section 21(2) of the U.P. Sales Tax Act:
The crux of the issue hinges on whether the Judge (Revisions), Sales Tax, can be considered a "civil or other competent court" within the meaning of the explanation to section 21(2). The assessee argued that the Judge (Revisions) was not a civil or competent court and thus, the period during which the proceedings were stayed by the Judge (Revisions) should not be excluded. The standing counsel for the department contended that the Judge (Revisions) should be considered a court because the Sales Tax Act and the Rules framed thereunder endowed the Judge (Revisions) with judicial powers similar to those of a court.
The court analyzed the nature of the Judge (Revisions) under the U.P. Sales Tax Act, noting that the Act and the Rules provided for the appointment of revising authorities from persons qualified to be High Court judges, and these authorities had to decide cases in a judicial manner. Despite these judicial trappings, the court concluded that the Judge (Revisions) did not perform judicial functions of the State but rather acted as an instrumentality of the State supervising the assessment and collection of taxes. The court cited various precedents, including Bharat Bank v. Employees of Bharat Bank and Virendra Kumar v. State of Punjab, to distinguish between courts and quasi-judicial tribunals.
The court held that merely because the Judge (Revisions) performed his duties in a judicial manner did not make him a court. The court also noted that the Legislature had deliberately used the term "court" in section 21(2) and "authority" elsewhere in the Act, indicating a clear distinction. Therefore, the period during which the proceedings were stayed by the Judge (Revisions) could not be excluded in computing the limitation period.
Conclusion:
The court concluded that the assessment order for the year 1952-53 was barred by limitation. The period during which the proceedings were stayed by the Judge (Revisions), Sales Tax, could not be excluded in computing the period of limitation because the Judge (Revisions) did not qualify as a "civil or other competent court" under the explanation to section 21(2) of the U.P. Sales Tax Act. The assessment made on 23rd June, 1962, was therefore barred by time. The question referred to the court was answered in the affirmative and in favor of the assessee, with costs assessed at Rs. 100.
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1973 (11) TMI 74
Issues: Interpretation of Section 5(3) of the Kerala General Sales Tax Act, 1963 regarding the liability of a selling dealer when goods purchased under declaration forms are not used for the intended purpose.
Analysis:
1. The judgment discusses Section 5(3) of the Kerala General Sales Tax Act, which allows for a concessional tax rate of one percent on goods sold for use as a component part of other goods mentioned in the First Schedule. The provision requires the selling dealer to obtain a declaration form from the purchasing dealer to avail of this concessional rate. The responsibility of the selling dealer is limited to obtaining and furnishing the declaration form to the assessing authority. The dealer cannot be held accountable for the actual use of the goods purchased from him by the purchasing dealer. The scheme of the Act indicates that once the selling dealer complies with the proviso of Section 5(3), their responsibility ceases, and they are entitled to the concessional tax rate.
2. The case involves a dealer dealing in paper and stationery, where the assessing authority sought to reopen the assessment based on a change in interpretation regarding what constitutes "paper products" under the Act. The petitioner had sold goods under declaration forms provided by purchasing dealers, but the assessing authority attempted to levy tax at the normal rate based on a different interpretation. The court held that the selling dealer's responsibility is limited to obtaining and furnishing the declaration forms, and they cannot be penalized if the goods are not used as intended. The court quashed the order seeking to reopen the assessment, stating that the selling dealer is not liable to pay tax at a rate higher than the concessional rate.
3. Drawing parallels with a similar provision in the Central Sales Tax Act, the judgment emphasizes that the selling dealer cannot be penalized for the misuse of goods purchased by the purchasing dealer. The selling dealer's duty is limited to ensuring the validity of the declaration forms and collecting tax based on the information provided in the forms. Any penalty for misapplication of goods lies with the purchasing dealer, and the selling dealer cannot be held responsible for the actual use of the goods. The court ruled in favor of the selling dealer, stating that there is no justification to reopen the assessment and quashed the order seeking to levy tax at the normal rate.
In conclusion, the judgment clarifies the limited responsibility of selling dealers under Section 5(3) of the Kerala General Sales Tax Act and establishes that they cannot be held liable for the actual use of goods purchased under declaration forms. The court's decision protects selling dealers from being penalized for the actions of purchasing dealers and upholds their entitlement to the concessional tax rate as per the provisions of the Act.
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1973 (11) TMI 73
Issues:
1. Whether the business of firewood carried on by the assessee-firm can be considered a manufacturing business?
2. Whether the assessee-firm can be termed as a manufacturer?
3. What is the liability of the assessee to pay tax - Rs. 50,000 or Rs. 10,000?
Analysis:
The judgment pertains to Sales Tax References related to an unregistered dealer in firewood for the assessment years 1959-60 and 1960-61. The Assessing Authority held the assessee liable to pay sales tax, which was upheld with modifications by the highest revisional authority. An application under section 22(1) of the Punjab General Sales Tax Act was dismissed as time-barred. The matter was brought to the court through petitions under section 22(2) for direction to refer questions of law. The key question referred was whether the business of firewood can be considered a manufacturing business and if the assessee is liable to pay tax at Rs. 50,000 or Rs. 10,000. The relevant provisions of the Act were analyzed to determine the liability of the dealer.
The court considered the argument that the assessee-firm should not be classified as a manufacturer but as a general dealer. The court referred to the definition of "manufacture" as bringing into existence a new substance, emphasizing that a mere change in the article is not sufficient for it to be considered a manufactured product. The court cited precedents to support the interpretation of the term "manufacture" in the context of sales tax legislation. It was established that the process of chopping and selling firewood did not result in a new substance with a distinctive name or character, therefore not meeting the criteria for manufacturing.
The court analyzed the nature of the trees used for firewood, highlighting that even after chopping or cutting them into pieces, the essential character of the material remained the same. The court distinguished the process of selling trees as raw material for fuel or timber from actual manufacturing activities. Various judicial decisions were referenced to support the conclusion that the business of firewood does not qualify as a manufacturing business. The court disagreed with a previous decision that considered chopping timber into firewood as a manufacturing process, asserting that such an activity did not result in a new article with a distinct character.
In conclusion, the court held that the business of firewood conducted by the assessee-firm could not be categorized as a manufacturing business, and the assessee could not be labeled as a manufacturer. The liability of the assessee to pay tax was determined to arise at Rs. 50,000. The court answered the question referred in the negative, ruling against the department. The assessee-firm was awarded costs in both references.
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1973 (11) TMI 72
Issues Involved:
1. Justification of turnover determined at Rs 2,00,000.
2. Exclusion of time spent in prosecuting remedy under section 30 for computing the period of limitation for filing the appeal.
3. Condonation of delay under section 5 of the Limitation Act.
Issue-wise Detailed Analysis:
1. Justification of Turnover Determined at Rs 2,00,000:
The court scrutinized whether the turnover determined at Rs 2,00,000 by the assessing authority was justified. The petitioner contended that the assessment was arbitrary and without any material basis. The Judge (Revisions) initially found the assessments too high and arbitrary, but later confirmed them based on the turnover fixed for the preceding year. However, it was revealed that the turnover for 1965-66 was Rs. 1,15,000, not Rs. 1,50,000, and the assessment for that year was pending revision. Consequently, the court concluded that the basis for confirming the assessments was erroneous and lacked material justification.
2. Exclusion of Time Spent in Prosecuting Remedy under Section 30:
The petitioner argued that the time spent in prosecuting proceedings under section 30 should be excluded when computing the period of limitation for filing the appeal, either under section 14 or section 5 of the Limitation Act. This contention was rejected by the appellate authority and the Judge (Revisions). The court reiterated its previous judgment (Satish Chandra Nirmesh Kumar v. Commissioner of Sales Tax) that the period spent in such proceedings should not be excluded, thus answering the question in the negative and against the assessee.
3. Condonation of Delay under Section 5 of the Limitation Act:
The petitioner also sought condonation of the delay under section 5 of the Limitation Act. The appellate authority dismissed the appeals as time-barred, and this stance was upheld by the court. The court noted that the petitioner had wilfully failed to appear on the fixed date, and thus, the delay could not be condoned. This question was also answered in the negative and against the assessee.
Additional Observations:
The court observed that the revising authority failed to conform to the High Court's judgment. Despite the High Court's finding that the turnover assessments were unjustified, the revising authority did not provide relief to the petitioner. The court emphasized that the revising authority must pass orders in conformity with the High Court's judgment under section 11(6) of the Act. The court also addressed the doctrine of merger, clarifying that the assessment orders did not merge with the appellate orders since the appeals were dismissed as time-barred and not on merits.
Conclusion:
The court allowed the petition, quashing the assessment orders dated 31st May 1969, for the assessment years 1966-67 and 1967-68. It permitted the Sales Tax Officer to pass fresh assessment orders in accordance with the law and the observations made in the judgment. The petitioner was entitled to the costs.
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1973 (11) TMI 71
Issues:
Whether a dealer exporting purchased cotton within 6 months from the date of purchase is entitled to deduction under section 5(2)(a)(vi) of the Punjab General Sales Tax Act, 1948.
Analysis:
The judgment addresses the issue of whether a dealer, who buys cotton in Punjab and exports it within 6 months, can claim a deduction under section 5(2)(a)(vi) of the Punjab General Sales Tax Act, 1948. The petitioners, various companies, purchased cotton and exported a portion of it. The Assessing Authority disallowed the deduction of the purchase price of the exported cotton, relying on a Supreme Court judgment. However, the High Court found that the Supreme Court did not rule out the deduction under section 5(2)(a)(vi) for cotton while assessing purchase tax. The High Court analyzed the provisions of the Act and concluded that the deduction must be allowed for goods sold in certain ways within 6 months of purchase to determine the taxable turnover. The court held that the Assessing Authority's decision to disallow the deduction for exported cotton was legally incorrect. Therefore, the court allowed the writ petitions, quashed the assessment orders, and directed fresh assessments in line with the judgment.
The judgment delves into the interpretation of sections 5(2)(a)(vi) and 5(3) of the Act to determine the liability for purchase tax and the calculation of taxable turnover. It emphasizes that the deduction under section 5(2)(a)(vi) must be allowed for goods sold to a registered dealer, in inter-State trade, or for export within 6 months of purchase. The court clarifies that the Assessing Authority should ascertain the dealer liable to pay purchase tax under section 5(3) while determining the taxable turnover based on allowed deductions from the gross turnover as per section 5(2). The judgment highlights the importance of correctly applying these provisions to ensure a fair assessment of purchase tax and deduction eligibility for exported goods.
The court distinguishes the present case from a previous Supreme Court judgment involving cotton sales, emphasizing that the earlier ruling did not preclude the deduction under section 5(2)(a)(vi) for exported cotton. By carefully analyzing the legal provisions and previous case law, the court concludes that the Assessing Authority erred in disallowing the deduction for exported cotton purchases. The judgment provides a detailed explanation of how the provisions of the Act should be applied to determine purchase tax liability and allowable deductions, ensuring a fair and lawful assessment process.
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1973 (11) TMI 70
Issues:
- Whether the freight charges incurred by the petitioner for transporting motor cycles are exempt from sales tax.
- Whether the freight charges can be considered as part of the consideration paid for the motor cycles.
Analysis:
The petitioner, a company dealing in motor cycles, spare parts, and tractors, claimed deduction for freight charges in transporting motor cycles from Haryana to Bangalore under the Mysore Sales Tax Act, 1957. The assessing authority disallowed the claim, leading to the petitioner filing a revision petition. The petitioner argued that the freight charges should be exempt from sales tax based on rule 6(4)(f)(i) of the Mysore Sales Tax Rules, 1957 and that the charges did not form part of the consideration. The petitioner relied on a Division Bench decision supporting exemption of such charges. However, the High Court noted that Supreme Court decisions in similar cases held that freight charges unconnected to sales could not be deducted from turnover. The Court found no evidence that the freight charges were incidental to the sales, ultimately rejecting the exemption claim based on previous rulings.
The second issue addressed whether the freight charges could be considered part of the consideration for the motor cycles. The Court referred to the Act's definition of 'turnover' as the aggregate amount for which goods are bought or sold, including any valuable consideration. Since the freight charges were included in the amount recovered from customers and not permitted to be deducted under any provision, the Court rejected the argument that the charges did not form part of the assessable turnover. Consequently, the petition was dismissed, and costs were awarded to the respondent. The judgment emphasized the importance of established legal principles and precedent in determining tax liability and consideration in commercial transactions.
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1973 (11) TMI 69
The High Court of Allahabad ruled that pulleys sold by the assessee were not liable to be taxed as machine parts at 6%, but rather as hardware at 3%. The Judge found that the pulleys were ordinary and not machine parts, therefore not subject to the higher tax rate. The reference was answered in the negative in favor of the assessee.
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1973 (11) TMI 68
The High Court of Allahabad ruled that a spoon is not included in cutlery under entry No. 5 of a specific notification, and therefore not taxable at the higher rate of seven percent. The court based its decision on the definition of "cutlery" and commercial understanding that spoons are not considered part of the cutlery trade. The decision was made by SATISH CHANDRA, J. and SETH H.N., JJ.
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1973 (11) TMI 67
The High Court of Allahabad was asked if the delay in filing an appeal was justified. The court found that the assessee had diligently pursued other legal remedies before filing the appeal, so the delay was condoned. The court ruled in favor of the assessee, ordering the department to pay costs of Rs. 100.
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1973 (11) TMI 66
Issues:
Challenge to impugned notices and rule 48(2) of Punjab General Sales Tax Rules, 1949 as ultra vires, applicability of Central Sales Tax Act, 1956 and Punjab General Sales Tax Act, 1948, entitlement to refund under section 12 of Punjab Act and section 15 of Central Act, validity of rule 48(2) of Haryana Rules, interpretation of relevant provisions, retrospective amendment of Central Sales Tax Act, 1956.
Analysis:
The case involved a petition challenging impugned notices and the validity of rule 48(2) of the Punjab General Sales Tax Rules, 1949. The petitioner, a cotton ginning and pressing factory, dealt in cotton and cotton seeds in Haryana and was registered under both the Central Sales Tax Act, 1956, and the Punjab General Sales Tax Act, 1948. The firm sold cotton to dealers in Haryana, who further sold it in inter-State trade. The dispute arose regarding the refund of tax under section 15 of the Central Act and section 12 of the Punjab Act. The State of Haryana issued notices for assessment, leading to this petition.
The petition challenged the validity of rule 48(2) of the Haryana Rules, claiming it was ultra vires section 12 of the Punjab Act and section 15 of the Central Act. The contention was that the rule allowed a different person to claim the refund, contrary to the provisions of the Acts. The counsel relied on a precedent to support this argument, emphasizing that only the person who paid the tax should be entitled to claim a refund. However, an amendment to the Central Sales Tax Act in 1972 clarified that only the person making the inter-State sale could claim the refund, not the petitioners who did not effect such sales. Consequently, the court rejected the petitioners' contention, holding them liable to pay the sales tax as per the impugned notices.
The judgment highlighted the importance of the retrospective amendment to the Central Sales Tax Act, 1956, which clarified the entitlement to claim refunds for inter-State sales. The court emphasized that the amendment restricted refund claims to the person making the inter-State sale, thereby dismissing the petitioners' challenge to the impugned notices and upholding the validity of rule 48(2) of the Haryana Rules. The judgment concluded by dismissing the writ petition, with no order as to costs, thus resolving the issues raised in the case comprehensively.
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