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Shyam Manohar Dixit vs Sales Tax Officer, Sector Iv, ...

High Court Of Judicature at Allahabad|30 January, 1970

JUDGMENT / ORDER

JUDGMENT Gulati, J.
1. In this group of four writ petitions, four assessment orders under the U. P. Sales Tax Act, all dated March 20, 1963 have been challenged. The assessment orders were made by Sri L. L. Merh, Sales Tax Officer, Kanpur. They were challenged on the ground that Sri Merh had not been authorised by the State Government to make any assessment under the Act in accordance with Section 2 (a) of the Act and as such the impugned orders were without jurisdiction. In support of this contention reliance was placed on a decision of a Division Bench of this Court in Commissioner of Sales Tax, U. P. Lucknow v. Punjab Trading Co. Ltd. Bhatinda, Sales Tax Kef, No. 276 of 1957, D/- 11-4-1963= (reported in ILR (1963) 2 All 303). On behalf of the opposite parties, reliance was placed upon the decision of another Division Bench in State v. puli Chand. AIR 1967 All 349 and the decision of a learned Single Judge of this Court in Agarwal Vastra Bhandar v. Commissioner of Sales Tax. U. P. Lucknow Misc. Case No. 51 of 1962. D/- 17-8-1966 = (reported in ILR (1967) 1 All 108). As the bench hearing these petitions was of the opinion that there appeared to be a conflict between the decisions relied upon by the two sides, it referred the following question, for the decision to a larger Bench:
"Whether in these four cases Sri L. L. Merh, Sales Tax Officer, Kanpur had jurisdiction to pass the four assessment orders, dated 20-3-1963?"
That is how these petitions have now come before this Full Bench:
2. The whole argument of the learned counsel for the petitioner is based upon the definition of the term 'assessing authority' as contained in Clause (a) of Section 2 of the Act, according to which 'assessing authority' means any person authorised by the State Government to make any assessment under this Act. He has referred to two notifications. The first is notification No. ST-602/X-1013(2)/53, dated March 21, 1953 under which Sri Merh was appointed as Sales Tax Officer for the first time. This notification reads:--
"With effect from February 25, 1953, Sri L. L. Merh, Asstt. Sales Tax Officer is appointed to officiate as Sales Tax Officer, Kheri vice Shri S. S. Sharma."
The second notification is notification No. ST-2815/X-915-61, dated July 5, 1961 published in the U. P. Gazette dated July 15, 1961, This notification contains a list of officers who were transferred from one circle to another. At serial No. 13 of this notification appears the name of Sri L. L. Merh who was transferred from circle Deoria to circle Kanpur. Sri Pachauri contends that neither of the two notifications contains an authorisation in favour of Sri L. L. Merh to make an assessment under the Act as required by Section 2 (a). He then referred to certain rules framed under the Act and contended that the rules contemplate the appointment of a person as Sales Tax Officer but none of the rules expressly authorises the Sales Tax Officer to make an assessment. According to him, there was a lacuna which was pointed out by this Court in the case of M/s. Punjab Trading Co. Ltd. (supra) and in order to fill up this lacuna. Rule 3-B was added which provided that "subject to the provisions of Rule 6, all Sales Tax Officers shall be assessing authorities and they are authorised to make assessments under the Act." This rule was added on September 26, 1964. It was prospective and could not be availed of to justify the impugned assessment which were made on March 20, 1963. The short question, therefore, that arises is as to what was the position before the addition of Rule 3-B. Could a Sales Tax Officer make an assessment without his having been specifically authorised to do so?
3. The authorisation contemplated by Section 2 (a) can be made by a general order, by a special order or under the rules framed by the State Government. Section 24 (1) empowers the State Government to make rules to carry out the purposes of the Act. Clauses (a) to (h) of Sub-section (2) of Section 24 enumerates certain matters in respect of which rules may be framed. Sub-clause (e) relates to the appointment, duties and powers of officers appointed for the purpose of enforcing provisions of the Act. There are several officers and authorities under the Act, some of whom exercise judicial powers of assessment, appeal and revision, while the other authorities exercise executive and administrative powers. The rules define such authorities as have not been defined in the Act and also lay down the extent of their jurisdiction and the manner in which such jurisdiction is to be exercised. We are here concerned with an Assessing Authority and shall refer only to such rules as relate to the appointment, duties and powers of an assessing Authority.
4. In exercise of the rule-making power conferred by Section 24 (1), the State Government has enacted a set of rules. When we look into the rules, to which we shall presently refer, we find that there is no mention of an 'Assessing Authority.' Instead, the rules speak of an Officer called the "Sales Tax Officer." Under Rule 2 (h) a Sales Tax Officer has been defined to mean a Sales Tax Officer of a circle appointed by the State Government to perform the duties and exercise the power of an Assessing Authority in such circle. Rule 2 (c) defines a circle as a Sales Tax Circle notified under Sub-rule (1) of Rule 3. Under Sub-rule (1) of Rule 3 the State Government may by notification in an official gazette create and fix the limits of the circle and appoint officers to such circle, and under Sub-rule (3) of Rule 3 where there are more than one Sales Tax Officer in a circle, the Commissioner is to determine their respective jurisdiction in such circle. Finally, we have Rule 6, the heading whereof is 'power of assessment' Clause (a) of that rule says that the Sales Tax Officer shall be the Assessing Authority in respect of the dealers carrying on business within the limits of his jurisdiction.
5. It is apparent that a Sales Tax Officer has been equated with an Assessing Authority. The various functions and powers of an Assessing Authority are to be found in the various provisions of the Act. The power to make an assessment by an Assessing Authority is to be found in Section 7 of the Act. Under Sub-section (1) of Section 7 every dealer is required to file the return or returns of his turnover and under Sub-sections (2) and (3) the Assessing Authority has to make an assessment of a dealer's turnover and the tax payable thereon. Therefore, once a person is appointed as Sales Tax Officer in a circle under Rule 3 (1), he automatically becomes the Assessing Authority in respect of all the dealers carrying on business within the territorial limits of his circle and by virtue of the provisions contained in Section 7, he is empowered to make an assessment under the Act. It follows, therefore, that no separate authorisation was needed from the State Government empowering a Sales Tax Officer to make assessments under the Act because that power he derived from Section 7 of the Act. The question then arises as to what kind of authorisation is contemplated by Section 2 (a). The answer is to be found in Rule 80 which reads as under:
"Power of Sales Tax Officer to be exercised by superior Officers--The Commissioner, the Additional Commissioner, the Deputy Commissioner and the Assistant Commissioner shall have all the powers exercisable by the Sales Tax Officer."
The authorities mentioned in Rule 80 exercise administrative and executive powers. Under the authority vested in the State Government under Section 2 (a) of the Act, the State Government has enacted Rule 80 to confer upon these superior executive Officers of the Department, the powers of a Sales Tax Officer, which include the power to make assessment. In absence of the authorisation contained in Rule 80, none of the authorities mentioned therein had the power to make assessments.
6. The scheme of the Act, therefore, becomes clear. The power to make an assessment under the Act vests in a Sales Tax Officer automatically, the moment he is appointed to a circle but such power of making assessment on other authorities of the Department has been conferred specifically by the State Government under Rule 80. We are, therefore, of the opinion that even before the addition of Rule 3-B, every Sales Tax Officer had the power to make an assessment under the Act, and there was no lacuna in that regard. Rule 3-B has merely stated in express terms what was already implied.
7. Assuming that Section 2 (a) contemplates an authorisation by the State Government in favour of a person to make assessment under the Act before he could be called an Assessing Authority, such an authorisation is, in our opinion, contained in Rule 6 (a).
8. There are, of course, observations in the judgment of Desai, C. J. in the case of M/s. Punjab Trading Co. Ltd. (supra) which support the contention of the learned counsel for the petitioner, but in that case this question was not directly involved, as has been pointed out by the learned Chief Justice himself. There the question was as to whether the Commissioner of Sales Tax could authorise a particular Sales Tax Officer to assess a non-resident dealer who had no place of business inside Uttar Pradesh and who had not declared any particular place as his principal place of business within Uttar Pradesh for the purpose of assessment under the Act. The observation of the learned Chief Justice to the effect that there was a lacuna in the Act inasmuch as the Rules only designate a Sales Tax Officer as an assessing authority but do not automatically authorise a Sales Tax Officer to make an assessment under the Act, is, in our opinion, obiter. We have already shown that there was no such lacuna; and in any case we would hesitate to accept a contention which cuts across the entire scheme as envisaged by the Act and the rules, because the rules have not been framed with meticulous care and leave scope for an argument which appealed to the learned Chief Justice.
9. The view that we have taken is supported directly by the Division Bench of this Court which decided the case of Duli Chand (supra). We are in respectable agreement with their observation at page 350 that:
"When he (Sales Tax Officer) is posted to a circle, he becomes automatically the assessing authority for that circle."
We also approve of the observation of Manchanda, J. in the case of M/s. Agra-wal Vastra Bhandar (supra) that:
"The provisions of Section 2 (a) read with Rule 6 constitute the Sales Tax Officer the 'assessing authority' for making any assessment under the Act."
10. We are, therefore, of the opinion that Sri Merh acquired jurisdiction to make an assessment under the Act on his initial appointment as Sales Tax Officer, Kheri under the notification of March 21, 1953 and he retained that power when he was posted as Sales Tax Officer in Kanpur circle on his transfer from Deoria.
11. We, therefore, answer the question referred to us in the affirmative, and direct that the writ petitions shall now be laid before the Bench concerned with this opinion and answer.
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Title

Shyam Manohar Dixit vs Sales Tax Officer, Sector Iv, ...

Court

High Court Of Judicature at Allahabad

JudgmentDate
30 January, 1970
Judges
  • B Gupta
  • S Chandra
  • R Gulati