1985 (8) TMI 341 - HC - VAT and Sales Tax

Court rules in favor of petitioner, directing compliance with statutory requirements and awarding costs

The court found in favor of the petitioner, ruling that they had complied with the statutory requirements and that the rejection of their application by ... Change of place of business - information within prescribed time - deduction from turnover on account of sales to registered dealers - exemption from furnishing declarations due to loss by fire or flood - rule 7(3) of the Delhi Sales Tax Rules, 1975 - registration certificate amendment - writ jurisdiction under Article 226Change of place of business - registration certificate amendment - information within prescribed time - Petitioner had a new place of business at 2820/17, Gurunanak Auto Market, Kashmere Gate, with effect from 27th May, 1982, and the registration certificate was rightly altered to reflect that additional place of business. - HELD THAT: - The Court accepted contemporaneous material - the petitioner's statement recorded to the police immediately after the fire (1st June, 1982) describing business at 2820/17 and listing destroyed ST-1 form numbers, the fire brigade certificate addressed to the petitioner at the same premises, the subsequent amendment of the registration certificate to Form ST-9 effective 27th May, 1982, and the absence of contradictory evidence (such as neighbour or owner statements) in the counter-affidavit. The small area affected by fire, the fact that the assessing authority changed the registration certificate after receipt of the intimation on 5th June, 1982, and the acceptance of a coterminous dealer's claim (M/s. Mehta Auto Agencies) reinforced the conclusion that the petitioner had in fact moved to and was carrying on business at 2820/17 on the date of the fire. The timing of receipt of the intimation by the department (5th June) did not negate that the place of business existed on 27th May, 1982.Finding that the petitioner had an additional place of business at 2820/17 on 27th May, 1982, and that the registration certificate correctly recorded that change.Rule 7(3) of the Delhi Sales Tax Rules, 1975 - exemption from furnishing declarations due to loss by fire or flood - deduction from turnover on account of sales to registered dealers - Conditions of rule 7(3) were satisfied and the petitioner was entitled to claim the benefit of exemption from furnishing declarations lost in the fire. - HELD THAT: - Rule 7(3) requires (i) an application within 30 days of the event and (ii) that the loss occurred at the place of business. The Court found the first condition complied with. On the second condition, having concluded that the petitioner occupied the premises on 27th May, 1982 and that the fire of 31st May, 1982 occurred at those premises, the destruction of declaration forms and accounts fell within the rule. The authorities' rejection rested solely on the fact that the departmental receipt of the intimation occurred after the fire; the Court held this immaterial because the statutory 30-day period for intimation remained unexpired and the registration alteration corroborated the petitioner's locus. In absence of adequate contrary material, the petitioner was held entitled to relief under rule 7(3).Rule 7(3) applies to the petitioner and the orders of the Commissioner and the Tribunal rejecting that claim were quashed; respondents directed to give effect to rule 7(3) in the assessment orders.Writ jurisdiction under Article 226 - Writ jurisdiction under Article 226 was properly exercised despite the existence of an alternative remedy before the Tribunal. - HELD THAT: - The Court observed that the Tribunal's rejection was on facts and that there was no adequate alternative remedy in relation to the concurrent factual and assessment on best judgment issues the petitioner faced. Given the seriousness of the alleged fire, the change in the registration certificate, and the absence of effective alternative relief, the Court concluded that exercise of writ jurisdiction was warranted to prevent prejudice and to decide the substantial question whether rule 7(3) applied.Writ petition entertained and grant of relief under Article 226 upheld.Final Conclusion: Writ petition allowed. The orders of the Sales Tax Commissioner and the Appellate Tribunal insofar as they rejected the petitioner's entitlement under rule 7(3) are quashed; respondents directed to apply rule 7(3) in the assessment orders for the listed years and to make appropriate changes; petitioner to have costs. Issues Involved:1. Compliance with Section 40 of the Delhi Sales Tax Act, 1975, and Rule 34 of the Delhi Sales Tax Rules, 1975.2. Application of Rule 7(3) of the Delhi Sales Tax Rules, 1975, regarding loss of declaration forms due to fire.3. Validity of the rejection of the petitioner's application by the Commissioner of Sales Tax and the Appellate Tribunal.4. Maintainability of the writ petition in light of an alternative remedy.Issue-wise Detailed Analysis:1. Compliance with Section 40 of the Delhi Sales Tax Act, 1975, and Rule 34 of the Delhi Sales Tax Rules, 1975:The petitioner, a proprietary concern dealing in motor parts and accessories, opened an additional place of business on 27th May 1982. According to Section 40 of the Delhi Sales Tax Act, 1975, and Rule 34 of the Delhi Sales Tax Rules, 1975, the petitioner was required to inform the appropriate authority within 30 days. The petitioner furnished this information on 5th June 1982, which was within the 30-day period. The court noted that the authorities rejected the application on the ground that it was received after the fire, but this was immaterial as the 30-day period had not expired.2. Application of Rule 7(3) of the Delhi Sales Tax Rules, 1975, regarding loss of declaration forms due to fire:Rule 7(3) provides that a dealer can be exempted from furnishing declarations if lost due to fire or flood, provided an application is made within 30 days of the event, and the loss occurs at the place of business. The petitioner claimed that a fire on 31st May 1982 destroyed their records, including ST-1 forms. The Commissioner of Sales Tax and the Appellate Tribunal rejected the petitioner's claim, arguing that the new place of business was not officially recognized at the time of the fire. However, the court found that the petitioner had indeed opened the new place of business and informed the authorities within the statutory period.3. Validity of the rejection of the petitioner's application by the Commissioner of Sales Tax and the Appellate Tribunal:The Commissioner of Sales Tax rejected the application on the grounds that the information about the new place of business was received after the fire. The Appellate Tribunal upheld this decision, stating that the delay in receiving the application was the petitioner's responsibility. However, the court disagreed, noting that the petitioner had 30 days to inform the authorities, and the fire occurred within this period. The court found no reason to reject the application based on the timing of the information reaching the authorities.4. Maintainability of the writ petition in light of an alternative remedy:The respondents argued that the writ petition was not maintainable due to the existence of an alternative remedy by way of a reference to the Appellate Tribunal. The court, however, noted that the Tribunal's decision was based on a factual finding rather than a question of law, making the alternative remedy inadequate. The court also emphasized the seriousness of the matter, involving the destruction of documents due to fire and the subsequent rejection of the petitioner's legitimate claims.Conclusion:The court concluded that the petitioner had complied with the requirements of Section 40 and Rule 34, and the rejection of the application by the Commissioner of Sales Tax and the Appellate Tribunal was unjustified. The court issued a writ directing the respondents to grant the petitioner the benefit of Rule 7(3) and to make appropriate changes in the assessment orders. The court also awarded costs to the petitioner.