KAMAL BROTHERS Vs. STATE OF UTTAR PRADESH

JUDGEMENT

(1.) These petitions can be disposed of by a common judgment as the facts and the question of law involved are identical. The petitioners in the present petitions are dealers registered under the U. P. Sales Tax Act and also the Central Sales Tax Act. They were assessed to tax under various orders both under the U. P. Act and also under the Central Sales Tax Act. While passing the assessment orders the Sales Tax Officer mentioned the amounts of tax paid by them and created demands for the remainder in cases where a balance was found to be due. The basis on which he mentioned the amount of tax paid were treasury chalans which were purported to have been received by him from the treasury. Subsequently, the Sales Tax Officer discovered that the treasury chalans on the basis of which the petitioners were given credit for tax were not found entered in the treasury records and neither in the register maintained by his office. He accordingly passed rectification orders under Section 22 in respect of assessment years in which the period of three years had not expired and for other years he passed orders under Rule 41, Sub-rule (8). The result of these orders was to create a demand on the petitioners for payment of tax in respect of amounts which according to the Sales Tax Officer had not been deposited in the treasury.

(2.) The petitioners have challenged these orders passed under Section 22 and Rule 41(8) of the Act by these petitions. On behalf of the department it is averred that the petitioners were given wrong credits for some amounts on the basis of fake treasury chalans and in fact the amounts had not been deposited by them in the treasury. In paragraph 5 of the counter-affidavit of Munsi Ram, Sales Tax Officer (in W.P. No. 191 of 1980), it is averred that a daily collection register is maintained in the office of the Sales Tax Officer. The entries in the register are made not on the basis of the treasury chalans submitted by the dealer at the time of filing of the return or subsequently thereafter, but on the basis of the departmental copy of the chalan received from the treasury which also contains a treasury schedule. It is stated that deposits are made through chalans in triplicate which are marked original, departmental copy and depositor's copy. The State Bank which receives the deposits returns the depositor's copy to the assessee and forwards the other two copies along with the bank schedule to the Treasury Officer, who keeps the original in his office and forwards the departmental copy to the Sales Tax Officer concerned along with a treasury schedule. The daily collection register is maintained in the sales tax office on the basis of the departmental copy and the treasury schedule. In these cases no original or departmental copies of the treasury chalans were submitted to the office. The register maintained by the department did not contain any entry of the chalans by which the petitioners are alleged to have made the deposits. It is also averred that action under Section 22 was taken when this mistake was discovered on a scrutiny of the registers maintained in the sales tax office. This fact was further confirmed by the enquiries made from the treasury and the bank. So far as the demand made for other years in which orders under Section 22 were not passed, the stand of the department is that as the tax had not been paid, action for demand and recovery of tax under Rule 41(8) and Section 8(8) of the Act was taken.

(3.) As the main dispute in these petitions was as to whether the payments alleged to have been made by the petitioners were in fact made, we directed the Sales Tax Officer to inquire into the matter and to submit a report. By his report dated 24th November, 1981, he has after inquiry from the State Bank and the treasury submitted a report to the effect that the disputed cash deposit had not been made in the treasury. Before we refer to the contention raised on behalf of the petitioners we might mention that although in the petition a large number of reliefs had been prayed for, the only question canvassed before us was the validity of the demands raised by orders passed under Section 22 and Rule 41(8). The counsel for the petitioners contended that the orders passed under Section 22 and Rule 41(8) of the Act are without jurisdiction. Now if the orders passed under Section 22 and Rule 41(8) are without jurisdiction the demand created on the strength of these provisions cannot obviously be enforced.