1978 (4) TMI 222 - HC - VAT and Sales Tax

Invalid Notice Under U.P. Sales Tax Act Leads to Assessment Order Annulment

Commissioner of Sales Tax Versus Ram Chand

The High Court held that the notice served under section 21 of the U.P. Sales Tax Act was invalid due to improper service, leading to the annulment of the ... - Issues involved: Validity of notice served u/s 21 of the U.P. Sales Tax Act for assessment year 1959-60.Summary:The assessee failed to file a return for the assessment year 1959-60, leading to the Sales Tax Officer issuing a notice u/s 21 of the U.P. Sales Tax Act, which was served by affixation. Subsequently, an assessment order was passed by the officer. Upon appeal, the assessment order was set aside, and the case was remanded. Following the remand, a best judgment assessment was made by the Sales Tax Officer due to the absence of maintained accounts, resulting in the assessee being taxed on a net turnover of Rs. 53,550 with a tax liability of Rs. 1,077.In a subsequent appeal, the assessee contended that the notice u/s 21 was not validly served, challenging the jurisdiction of the proceedings. This plea was accepted, leading to the annulment of the assessment order, a decision upheld by the revising authority. The High Court was tasked with determining whether the assessee could question the notice's validity during the remand proceedings.The Court emphasized that the service of notice u/s 21 is crucial for the officer's jurisdiction, citing precedent cases. It was established that a fundamental issue affecting jurisdiction can be raised at any stage, including on appeal or revision. The Court found that the notice's service by affixation was invalid as other prescribed modes were not exhausted, rendering the initiation of proceedings without jurisdiction. Consequently, the assessment order was rightfully annulled.In conclusion, the Court answered the question in favor of the assessee, affirming the invalidity of the notice served u/s 21 and granting costs of Rs. 200 to the assessee.