1968 (7) TMI 72 - HC - VAT and Sales Tax

Court Invalidates Time-Limit Rules for Tax Declarations

The court held that the requirements under rules 9(2)(a) and 9-B(3)(a) of the Central Sales Tax (Bihar) Rules, 1957, imposing a time-limit for filing ... - Issues Involved:1. Constitutionality of rules 9(2)(a) and 9-B(3)(a) of the Central Sales Tax (Bihar) Rules, 1957.2. Timing for filing declarations and certificates.3. Authority of appellate or revisional bodies to accept late declarations and certificates.4. Error of law by the Board in refusing late submissions.Detailed Analysis:Issue 1: Constitutionality of Rules 9(2)(a) and 9-B(3)(a)The primary issue was whether the requirements under rules 9(2)(a) and 9-B(3)(a) of the Central Sales Tax (Bihar) Rules, 1957, which mandated the attachment and filing of declarations in Form C and certificates in Form D with returns, were constitutionally valid. The court held that these rules imposed a time-limit for filing the declarations and certificates, which was not authorized by the Central Sales Tax Act. The court found that the expression 'in the prescribed manner' did not encompass the power to prescribe a rigid time-limit. Hence, the requirement of filing these documents with the returns was deemed ultra vires the rule-making power of the State Government.Issue 2: Timing for Filing Declarations and CertificatesThe court examined when the declarations and certificates should have been filed. It was concluded that these documents could be furnished after the filing of the returns and before the assessment order was passed. The court noted that the Central Act did not authorize the imposition of a rigid time-limit for the submission of these documents. Therefore, the requirement to file them with the returns was not valid.Issue 3: Authority to Accept Late Declarations and CertificatesThe court considered whether the appellate or revisional authority had the power to accept declarations and certificates if filed after the assessment order. It was held that both the appellate authority under section 30(5) and the revisional authority under section 31 of the Bihar Act had the power to set aside the assessment and direct the assessing authority to pass a fresh order after further inquiry. This included giving the assessee an opportunity to furnish the declarations and certificates. The court found that the Deputy Commissioner and the Board erred in their view that they lacked such power.Issue 4: Error of Law by the BoardThe court evaluated whether the Board committed any error of law in refusing to give the assessee an opportunity to file the declarations and certificates at a late stage. It was concluded that the Board did not err in law. The Board had considered whether sufficient cause was shown for the delay and found that the assessee had ample opportunity to submit the declarations and certificates before the assessment but failed to do so. The court noted that determining 'sufficient cause' is generally a question of fact and held that the Board's decision in this regard did not constitute an error of law.Conclusion:The court reframed the question of law to focus on whether the assessee should have been given an opportunity to furnish declarations and certificates after filing the returns or after the assessment order. The court answered this question partly in favor of the assessee by holding that declarations and certificates could be submitted after filing returns but before the assessment order. However, it ultimately ruled against the assessee, finding no error of law in the Board's refusal to accept late submissions. The reference was answered accordingly, with no order as to costs.