RAMNATH DUBEY Vs. COMMISSIONER SALES TAX UTTAR PRADESH

JUDGEMENT

(1.) THIS is a reference under section 11(1) of the U.P. Sales Tax Act.

(2.) THE assessee is a manufacturer and dealer in bricks. He disclosed his turnover for the assessment year 1961-62 at Rs. 1,00,535.15 and Rs. 73,938.39 for the assessment year 1963-64. He deposited tax on this turnover at the rate of 2 per cent. which was the rate of tax prescribed under the charging section 3. The Sales Tax Officer did not accept the returns of the assessee and estimated the turnover for the two years at Rs. 1,51,000 and Rs. 1,17,000 respectively. He levied tax at the rate of 6 per cent. on the turnover for the year 1961-62 and at the rate of 7 per cent. on the turnover for the year 1963-64. It may be mentioned here that brick is a commodity which is taxable under section 3-A of the U.P. Sales Tax Act and according to the notifications issued under that section the rate of tax on the turnover of bricks was 6 per cent. during the year 1962-63 (sic) and 7 per cent. during the year 1963-64. The assessee was aggrieved and he filed two appeals without depositing any further tax. A preliminary objection was taken at the time the appeals came up for hearing that the appeals were incompetent because the assessee had failed to deposit the admitted tax as required by the first proviso to section 9 of the Act. The assessee's contention that the bricks are a commodity which is not taxable under section 3-A and the tax is leviable under the charging section was overruled and the appeals were dismissed as incompetent. The assessee went up in revision and contended that he had deposited the tax which he had admitted to be due and it was not necessary for him to deposit the tax as eventually calculated by the Sales Tax Officer, because he had disputed the legality of the notifications under which the enhanced rate of tax was fixed on the turnover of bricks. His further contention was that as he had disputed the jurisdiction of the Sales Tax Officer, who made the assessment, he was under no liability to pay any tax at all before filing the appeals. These contentions have been rejected by the Judge (Revisions). The assessee has asked for a reference and the revising authority has submitted the statement of the case and has invited the opinion of this court on the following questions of law :

(3.) IT is thus clear that before an appeal can be entertained under section 9, the assessee must adduce evidence of the payment of the admitted tax. The assessee had admitted certain turnover in his returns. Obviously the amount of tax payable by him would be calculated with reference to the turnover so shown in the return. But the question is as to what is the rate at which the tax should be calculated. According to the assessee, the rate of tax on bricks should be 2 per cent. which is the general rate prescribed under section 3. As already mentioned, bricks have been made taxable under section 3-A. The State Government has been issuing notifications from time to time under that section. There are two notifications relevant for our purposes according to which the rate of tax on bricks was 6 per cent. during the year 1961-62 and 7 per cent. during the year 1963-64. So long as these notifications stand, the rate of tax on bricks could not be other than that prescribed in the notifications. The assessee contends that the notifications were ultra vires, because brick was not a commodity which went through successive sales and hence section 3-A had no application to it. Now this is a question which can neither be raised before the appellate authority under section 9, nor before the revising authority under section 10. In K. S. Venkataraman and Co. v. State of Madras ([1966] 17 S.T.C. 418 (S.C.).), the Supreme Court held that the Sales Tax Tribunal can only decide a dispute between the assessee and the Tribunal in terms of the provisions of the Madras Sales Tax Act and the question of ultra vires was foreign to its jurisdiction. That being the position, it was not open to the sales tax authorities to entertain any ground against the vires of the notifications. Accordingly it was not open to the assessee to take any such ground before the sales tax authorities. Once that ground goes, the admitted tax on the turnover of bricks would be at the rates specified in the two notifications and not at the rate specified in section 3 which is applicable to the commodities which are taxable at multiple points. It follows, therefore, that in order to calculate the admitted tax on the turnover of bricks, the assessee had to calculate the same by applying the rates specified in the two notifications on his admitted turnover as disclosed in the returns filed by him. He was clearly wrong in applying the rate of 2 per cent. The same view has been taken by this court in Kanpur Vanaspati Stores, Kanpur v. Commissioner of Sales Tax, U.P. ([1969] 23 S.T.C. 62.). Therefore, our answer to question No. (1) is that the appropriate rate for the purposes of determining the admitted tax was 6 per cent. during the assessment year 1961-62 and 7 per cent. during the year 1963-64.