TaxTMI 
TaxTMI 
1993 (2) TMI 297
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....ion 46A of the Gujarat Sales Tax Act, 1969, and is void ab initio or is merely an irregular order? (3) If the answer to question No. (2) above is in the negative, whether in the facts and circumstances of the case, the applicant is justified in claiming refunds of the amount of tax remitted?" 2.. The following are the relevant facts: (i) The applicant, M/s. Bhupendra Iron & Steel Re-rolling Mills, which manufactures iron bars from scrap at Bhavnagar, is a dealer registered under the Act. The Sales Tax Officer (2), Division-1, Bhavnagar, passed the final order of assessment under section 41(3) of the Act in respect of the applicant on February 2, 1981 for the period from April 1, 1977 to March 31, 1978 raising the additional demand of Rs. 36,977.62 consisting of Rs. 27,189.48 by way of tax and Rs. 9,788.14 by way of penalty under section 45(6) of the Act. The proceedings initiated before the Sales Tax Officer in December 1979 could not be completed within a reasonable time as the case was adjourned from time to time at the instance of the applicant, and also because the applicant had requested the Sales Tax Officer to stay the assessment proceedings till the outcome of the ....
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....alf of the applicant and reference was made to certain judgments of the Supreme Court and the High Court in order to fortify the submission that non-compliance with the provision of section 46(A) of the Act which was mandatory in character would have the effect of rendering the order of assessment a nullity in the eye of law and so the question of remanding the matter to the Sales Tax Officer for passing appropriate orders after compliance with those provisions did not arise. The Tribunal found that the orders of the Sales Tax Officer were clearly not in accordance with the provision of the Act in view of certain admitted facts but those orders could not be said to be null and void and completely without jurisdiction in view of the fact that they had been passed by the Sales Tax Officer under the powers vested in him under section 41 of the Act. The Tribunal found that though the Sales Tax Officer possessed the initial jurisdiction to assess a dealer under section 41 of the Act, he had not served on the appellant a draft order of assessment in the prescribed manner and so the Assistant Commissioner had passed a proper order of remand in order to enable the Sales Tax Officer to foll....
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....ority for fresh assessment. 5.. The relevant portion of section 46A of the Act which is material for deciding the question under reference reads as under: "46A. (1) Where any sales tax authority mentioned in section 27 exercising the powers under section 41 proposes to make an order of assessment under that section and, such order if made, would in the opinion of such authority, impose on a dealer a liability to pay an amount not less than Rs. 25,000 by way of tax in respect of a period in addition to amount of tax indicated by the dealer in his declaration or return in respect of that period, such authority shall serve in such manner as may be prescribed on such a dealer a draft order and invite his objections in relation to it. (2) .................... (3) Where the dealer to whom the draft order is served under sub-section (1) or (2) communicates in writing to the authority his objections in relation to the draft order within a period of thirty days from the date of service of the draft order, the authority shall transfer the proceedings to such other sales tax authority to which an appeal against the order would have lied under section 65 and thereupon the other aut....
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....in the stipulated period. It is, therefore, clear that the assessment order passed by the sales tax authority in the present case did not lack initial jurisdiction in respect of subject-matter of the assessment under the Act but his order suffered from irregular exercise of jurisdiction due to non-compliance with the provision contained in subsection (1) of section 46A. If the requisite procedure is not complied with naturally the appellate authority can always remand the matter to the original authority for following the procedure prescribed under the law after setting aside the illegal order passed by him. The assessment order passed by the Sales Tax Officer was no doubt illegal, but it has to be set aside by the appellate authority by directing the sales tax authority to make fresh assessment under the third proviso to section 42. 6A. As indicated earlier, the appellate authority has already found that the assessment proceedings initiated before the Sales Tax Officer would not be completed within a reasonable time as the cases had to be adjourned from time to time at the instance of the applicant, and the applicant would not be justified even otherwise to invoke the limita....
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....reme Court pointed out the distinction between want of jurisdiction and irregular assumption of jurisdiction. It was held that an order passed by the authority with respect to the matter over which it had no jurisdiction is a nullity, but the order passed by the authority which has jurisdiction over the matter, but which he has assumed it otherwise than in the mode prescribed by law, is not a nullity. It was further held that even if proceedings for assessment were taken against non-registered dealer without issue of a notice under section 10(1) that would be a mere irregularity in the assumption of jurisdiction and the orders of assessment passed in those proceedings cannot be held to be without jurisdiction. 9.. Mr. R.D. Pathak, referred to the judgment in B.C. Malliah v. State of Karnataka [1981] 47 STC 190 (Kar). The question involved in that judgment was whether after the issue of general order by the Commissioner of Sales Tax divesting Commercial Tax Officer of the jurisdiction to take proceedings in all cases where tax liability was Rs. 50,000 or more and vesting it on the Assistant Commissioner of Commercial Taxes the proceedings commenced by the Commercial Tax Of....