GULAB CHAND Vs. STATE OF U P

JUDGEMENT

(1.) THE plaintiff appellant filed the suit against the State of U.P. and five others for injunction restraining the State of U.P. from recovering the alleged amount of sales tax for the assessment year 1957-58 and for refund of Rs. 300.00 which had been realised by the State of U.P. from him. It was alleged by the plain tiff that the father of the defendant No. 3, namely, Bhola Ram, had taken a contract for sale of liquor and Bhang for the period commenc ing from April 1, 1957 to March 31, 1958. An assessment notice was issued to Bhola Ram by the Sales Tax Officer in respect of the busi ness done by him. Bhola Ram did not file any objection. He was ultimately assessed to sales-tax and a sum of Rs. 895.94 was claimed by way of sales-tax from him. He did not file any appeal against the assessment order nor paid the amount of sales tax. Consequently a recovery certificate was issued against him. During the proceedings of recovery Bhola Ram died.

(2.) THE defendants Nos. 3 to 6 are the heirs of Bhola Ram. They filed an objection before the Sales Tax Officer contending, inter alia, that Bhola' Ram was not the proprietor of the business in question and was not liable to pay the sales tax. On the contrary, the plaintiff Gulab Chand was liable to pay the same in view of an agreement dated December 13, 1957. It appears that the recovery certificate was then issued in the name of Gulab Chand and the amount was sought to be recovered from him. In the course of that proceedings an attachment order was issued. So also .a warrant of arrest was issued against Gulab Chand. Further a sum of Rs. 300.00 was also realised from Gulab Chand. The appellant then filed the suit which has given rise to this appeal. That suit was contested by the State of U.P. on a number of grounds. It was alleged by the State of U.P. that the plaintiff was the proprietor of the business of liquor and Bhang in pursuance of an agreement dated December 21, 1957 Which was entered into between him and Bhola Ram deceased. Hence, the recovery certificate issued in the name of the plaintiff was valid and binding. It was further alleged that the said recovery certificate was issued after due notice to Gulab Chand. The State of U.P. further pleaded that the plaintiff was bound to pay tax under Section 3-C (2) of the Sales Tax Act and that the suit was barred by Section 17 of the U.P. Sales Tax Act and the Court had no jurisdic tion to try the same. The heirs of Bhola Ram, namely, defendants Nos. 3 to 6, also contested the suit alleging, Inter alia, that Bhola Ram was not the proprietor of the business in question but was an em ployee of the plaintiff, that the plaintiff was the proprietor of the said business and that the agreement dated December 13, 1957 absolved Bhola Ram from the liability of the sales-tax. In rejoinder, the plaintiff contended that he had become the owner of the. shop in question from December 1. 1957 and as the sales proceeds from December 1, 1957 to December 31, 1958 were not over Rs. 3,000.00 he was not liable to pay any sales- tax inasmuch as the turn over was not assessable. He denied his liability to any sales-tax for any period prior to December 1, 1957. On these pleadings a number of issues were framed.

(3.) FOR the appellant, it was urged that the appellate Court erred in holding that the suit was not cognizable by the civil Court. The submission was that the plaintiff appellant was not assessed to sales-tax with regard to the period in question. No notice was given to him for assessing him for sales-tax and that no demand was made for making payment of the sales-tax dues in question. Hence the reco very certificate issued against him was without jurisdiction and the entire proceedings of recovery were also unauthorised and without jurisdiction. The learned counsel for the State, however, submitted that the suit was barred by the provisions of Section 17 of the U.P. Sales Tax Act, that it was within the competence of the Sales Tax Officer to amend the recovery certificate, that the recovery certificate was in fact amended after due notice to the plaintiff and the order amending the recovery certificate as also the recovery certificate it self were within jurisdiction and could not, therefore, be questioned in a court of law in a suit.