1991 (6) TMI 219 - HC - VAT and Sales Tax

High Court rules Sales Tax Officer lacked jurisdiction for second reassessment during pending appeal. Importance of following Gujarat Sales Tax Act.

The High Court ruled in favor of the dealer, holding that the Sales Tax Officer lacked jurisdiction to conduct a second reassessment while the first ... - Issues:1. Jurisdiction of Sales Tax Officer to initiate second reassessment during the pendency of the first appeal.2. Validity of the second reassessment order passed by the Sales Tax Officer during the pendency of the first appeal.Analysis:The case involved a reference under section 69 of the Gujarat Sales Tax Act, 1969, initiated by the Revenue against a dealer registered under the Act. The assessment order for the Samvat Year 2030 was passed on December 3, 1975. Subsequently, a surprise visit was conducted on May 3, 1976, during which certain books of accounts and materials were seized, leading to a reassessment order on July 30, 1977. The dealer filed an appeal against this reassessment order, which was pending until April 25, 1979.The main contention revolved around the Sales Tax Officer issuing a notice for a second reassessment during the pendency of the first appeal. The dealer argued that the officer lacked jurisdiction to initiate a second reassessment while the first appeal was pending. Despite this, the Sales Tax Officer passed the second reassessment order on March 14, 1978. The dealer then appealed to the Assistant Commissioner (Appeal), Division II, Ahmedabad, followed by a second appeal to the Tribunal.Before the Tribunal, two key points were raised: firstly, the jurisdiction of the Sales Tax Officer during the pendency of the first appeal, and secondly, the validity of passing a reassessment order during the appeal process. The Tribunal ruled in favor of the dealer, citing the second proviso to section 44 of the Act, which allows the appellate or revisional authority to pass orders during pending proceedings after giving the dealer a chance to be heard.The High Court upheld the Tribunal's decision, emphasizing that the proviso under section 44 grants authority to the Sales Tax Department to report to the superior forum when further material surfaces during appeal or revision proceedings. This ensures a structured process and prevents constant interference in assessment proceedings. The Court agreed with the interpretation accepted by the Tribunal, stating that adopting any other view would lead to prolonged assessment procedures and potential harassment of the assessee.Ultimately, the High Court answered the reference in affirmative, in favor of the dealer and against the Revenue, highlighting the clarity of the proviso under section 44 and the need to maintain a fair and efficient assessment process without undue harassment to the assessee.