1991 (1) TMI 391 - SC - VAT and Sales Tax

Supreme Court overturns High Court order, emphasizing judicial review for constitutional challenges.

The Supreme Court allowed the appeal, setting aside the High Court's order and remitting the writ petition for further consideration. The Court clarified ... Appellants sought to assail the vires of section 4-A(3) of the U.P. Sales Tax Act, 1948 Held that:- Appeal allowed. The High Court was not right in its contemplation that the vires of the impugned provisions could be examined in the revision proceedings. The jurisdiction of the High Court in revision is under the same limitation in so far as the contention as to constitutionality is concerned. The High Court can, of course, deal with the question of constitutionality in judicial review of legislation under article 226. That is what the appellants sought to do before the court in the writ petition. The High Court was not justified in requiring the appellants to have recourse to proceedings of revision taken under the 'Act' to have the contention as to constitutionality resolved. Issues:1. Challenge to Commissioner's order under U.P. Sales Tax Act.2. Validity of section 4-A(3) of the U.P. Sales Tax Act.3. Jurisdiction of High Court in revision proceedings.4. Adjudication of constitutionality in judicial review.5. Appeal against High Court's order.Analysis:Issue 1: Challenge to Commissioner's order under U.P. Sales Tax ActThe petitioner challenged an order by the Commissioner of Sales Tax under section 4-A(3) of the U.P. Sales Tax Act, claiming the Commissioner lacked the authority to cancel the certificate of eligibility. However, the High Court noted that the petitioner had already appealed to the Sales Tax Tribunal, which dismissed the appeal as time-barred. Subsequently, the petitioner filed a revision challenging the Tribunal's order. The High Court declined to interfere under Article 226 of the Constitution, as the Tribunal's decision superseded the Commissioner's order.Issue 2: Validity of section 4-A(3) of the U.P. Sales Tax ActThe appellants sought to challenge the vires of section 4-A(3) of the U.P. Sales Tax Act, introduced by U.P. Act No. 25 of 1985 and further amended by U.P. Act No. 17 of 1987. The High Court initially dismissed the writ petition, suggesting that the question of constitutional validity could be raised in revision proceedings. However, the Supreme Court disagreed, stating that the High Court's jurisdiction in revision does not extend to examining the constitutionality of statutory provisions, citing precedents that authorities under an Act cannot question the vires of the Act itself.Issue 3: Jurisdiction of High Court in revision proceedingsThe Supreme Court emphasized that the High Court, like other authorities under an Act, cannot adjudicate on the constitutionality of statutes under which they derive their powers. The Court clarified that the High Court's role is to review legislation under Article 226, not to address constitutional issues in revision proceedings. The appellants' attempt to challenge the provision's validity through revision was deemed inappropriate.Issue 4: Adjudication of constitutionality in judicial reviewThe Supreme Court highlighted that judicial review of legislation under Article 226 is the appropriate avenue to challenge the constitutionality of statutory provisions. The Court criticized the High Court for directing the appellants to pursue resolution of constitutional issues through revision proceedings, reiterating that such matters fall under the purview of judicial review.Issue 5: Appeal against High Court's orderUltimately, the Supreme Court allowed the appeal, setting aside the High Court's order and remitting the writ petition for further consideration in accordance with the law. The Court suggested consolidating the revision petition and the writ petition for efficiency. Additionally, the Court declined to stay the Commissioner's order but granted a temporary stay for four weeks to allow the appellants to seek appropriate relief from the High Court. Each party was directed to bear their own costs in the appeal.This comprehensive analysis outlines the key issues addressed in the judgment, focusing on the challenge to the Commissioner's order, the validity of the statutory provision, the jurisdiction of the High Court, and the appropriate avenues for adjudicating constitutional issues.