1969 (7) TMI 101 - HC - VAT and Sales Tax

Court Holds Rule 12(10) Invalid for Time Limit on Declarations

The High Court held that it lacked jurisdiction to declare Rule 12(10) of the Central Sales Tax (Orissa) Rules, 1957, ultra vires under section 24(1) of ... - Issues Involved:1. Jurisdiction of the High Court under section 24(1) of the Orissa Sales Tax Act, 1947.2. Validity of Rule 12(10) of the Central Sales Tax (Orissa) Rules, 1957.Detailed Analysis:1. Jurisdiction of the High Court under section 24(1) of the Orissa Sales Tax Act, 1947:The primary issue was whether the High Court had the jurisdiction and power under section 24(1) of the Orissa Act to declare Rule 12(10) of the Central Sales Tax (Orissa) Rules, 1957, ultra vires the Central Act. The preliminary objection raised was that the Tribunal, being a creature of statute, could not question the vires of the provision under which it functions. The High Court agreed with this contention, citing the Supreme Court decision in Venkataraman & Co. v. State of Madras, which held that an authority created by a statute cannot question the vires of that statute or any of its provisions. The High Court's power under section 24 of the Orissa Act is advisory and limited to answering questions of law arising out of the Tribunal's order. Consequently, the High Court concluded that it had no jurisdiction under section 24 of the Orissa Act to declare Rule 12(10) ultra vires. However, the writ application to declare Rule 12(10) ultra vires was maintainable and could not be canvassed in the reference cases under section 24(1) of the Orissa Act.2. Validity of Rule 12(10) of the Central Sales Tax (Orissa) Rules, 1957:The second issue was whether Rule 12(10) was ultra vires section 8(4) and section 13 of the Central Sales Tax Act. Section 8(1) and section 8(4) of the Central Act, as they stood during the relevant period, required the selling dealer to furnish a declaration in the prescribed manner to avail of the concessional tax rate. The Supreme Court in Sales Tax Officer, Ponkunnam v. K.I. Abraham had interpreted 'in the prescribed manner' to exclude the element of time, thereby invalidating any rule prescribing a time-limit for filing declarations. Rule 12(10) of the Central Sales Tax (Orissa) Rules required declarations to be attached to the returns, which had to be filed within one calendar month of the expiry of each quarter as per Rule 7(1). The High Court found that Rule 12(10), read with Rule 7(1), effectively prescribed a period of limitation for filing declarations, making it ultra vires section 8(4) and section 13 of the Central Act. The High Court held that declarations could be filed within a reasonable time before assessment, and the test of reasonable time depended on the facts and circumstances of each case.Conclusion and Orders:The High Court declared Rule 12(10) of the Central Sales Tax (Orissa) Rules, 1957, ultra vires to the extent that it required declarations to be attached to the returns. The High Court issued a writ of certiorari quashing the appellate order of the Tribunal and directed the Tribunal to rehear the appeal in light of the observations made. The writ application was allowed, and parties were ordered to bear their own costs.Separate Judgments:PATRA, J. agreed with the judgment delivered by MISRA, C.J., and the application was allowed.