Relation-back of a registered lease deed can validate earlier eligibility for sales tax benefits

A later registered lease deed expressing ratification of an earlier unregistered lease deed was treated as relating back to the earlier transaction date. The article explains that, where an act done on behalf of another is subsequently affirmed, the later formal document may operate from the date of the original arrangement. Applying that principle, the relevant eligibility conditions under section 4-A of the U.P. Sales Tax Act were considered satisfied from the earlier lease date, making the later restriction on the eligibility certificate unsustainable.

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Issues: Whether a registered lease deed executed later but expressing ratification of an earlier unregistered lease deed could relate back to the earlier date so as to satisfy the conditions for eligibility certificate under section 4-A of the U.P. Sales Tax Act, 1948.

Analysis: The petitioner's case rested on the principle that an act performed on behalf of another may be ratified and, once ratified, the later formal document can operate from the date of the earlier transaction. The Court relied on prior authority holding that a registered lease deed may relate back to the date of execution of the earlier instrument and on the principle that acts of one family member managing the property can be affirmed by another through subsequent execution of documents. On that basis, the Court treated the registered lease deed as effective from the date of the earlier unregistered lease deed, with the result that the petitioner was to be assessed on the footing that the relevant conditions stood fulfilled on the date of first sale.

Conclusion: The later registered lease deed related back to 1 June 1989, and the restriction of the eligibility certificate from 20 July 1992 was unsustainable; the petitioner was entitled to the benefit of the eligibility certificate from 23 September 1989.

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