2002 (10) TMI 748 - HC - VAT and Sales Tax

Summary

Issues:
Challenge to validity of notification under Rajasthan Sales Tax Act
Availability of alternate statutory remedy for challenging notification validity

Analysis:
The petitioner, a marble manufacturing and selling company, availed deferment of tax under the Deferment Scheme of 1989 and shifted the point of tax as permitted by the State Government's notifications. However, a subsequent notification in 1991 added an Explanation barring dealers granted tax exemption from shifting tax liability. This Explanation was later deleted in 1995 without any saving clause. The petitioner, upon reassessment in 1998, faced a tax levy based on the deleted Explanation. The assessing officer rejected the petitioner's argument and passed a reassessment order, leading to the petitioner's challenge before the Rajasthan Taxation Tribunal, which was later transferred to the High Court.

The High Court considered the issue of relegating the petitioner to an alternate statutory remedy for challenging the validity of the notification under the Rajasthan Sales Tax Act. It referenced previous judgments, including one by the apex Court, stating that challenging the validity of a provision or notification before departmental authorities does not bar invoking constitutional remedies. The Court highlighted inconsistencies in previous judgments and concluded that the learned single Judge erred in dismissing the petitions solely on the ground of alternate remedy.

Regarding the validity of the notifications, the Court analyzed the effect of the 1991 notification's Explanation deletion in 1995. It cited legal principles that proceedings under a deleted provision become non est unless saved by a specific provision. As the 1991 notification was not saved by a saving clause, the Explanation ceased to exist, rendering subsequent reassessment proceedings without jurisdiction or authority of law. Consequently, the Court allowed all three special appeals, quashing the single Judge's order and the reassessment orders in each writ petition.

In conclusion, the High Court's judgment emphasized the importance of constitutional remedies in challenging statutory provisions' validity, highlighted the impact of deleted provisions on legal proceedings, and ultimately ruled in favor of the petitioner, setting aside the reassessment orders based on a non-existent Explanation in the notifications.