PREM RAJ AND SONS Vs. SALES TAX OFFICER

JUDGEMENT

(1.) THE petitioner-firm are building contractors and are registered as a dealer under the Bengal Finance (Sales Tax) Act, 1941, as extended to Delhi. With respect to the year 1955-56 the petitioner-firm filed a sales tax return and the Sales Tax Officer by his order dated 30th April, 1957, inter alia decided, following the judgment of the Chief Commissioner, Delhi, in Gulab Rai Parshotam Das v. The State of Delhi, that section 2(h) of the said Act and rule 28 framed thereunder being ultra vires, the petitioner-firm were not liable to pay any sales tax with respect to the building contract activities. They were, however, held liable to pay tax (a) on sale of bricks and (b) for certain purchases made, free of tax, on the strength of the registration certificate during the period in question. In the end the Sales Tax Officer came to the conclusion that the petitioner-firm had paid Rs. 2,450.19 nP. in excess, which were refundable to them. A notice dated 10th January, 1958, was served on the petitioner-firm by the Sales Tax Officer under rule 64 of the Delhi Sales Tax Rules, 1951, calling upon the petitioner-firm to show cause why the assessment order dated 30th April, 1957, be not reviewed in view of the Supreme Court decision in Mithan Lal v. State of Delhi ([1958] 9 S.T.C. 417; A.I.R. 1958 S.C. 682). The petitioner-firm filed a petition in this Court under Article 226 of the Constitution but the same was dismissed as premature. The Sales Tax Officer by his order dated 17th November, 1959, reviewed the previous assessment order dated 30th April, 1957, and determined a sum of Rs. 12.37 nP. payable by the petitioner-firm besides Rs. 5,084-5-0 deposited with the return. A demand notice dated 17th November, 1959, demanding the said amount of Rs. 12.37 nP. was also served on the petitioner-firm. The assessment order dated 17th November, 1959, was based on the decision of the Supreme Court in Mithan Lal's case ([1958] 9 S.T.C. 417; A.I.R. 1958 S.C. 682), according to which the sales involved in building contracts in Delhi could be taxed. In the course of the order the Sales Tax Officer observed :-

(2.) THE assessment order dated 17th November, 1959, and the demand notice of the same date have now been challenged by the present writ petition.

(3.) SO far as the first contention is concerned it is not necessary to consider the validity of rule 28 inasmuch as the impugned order shows that the petitioner-firm themselves voluntarily offered to take exemption at the rate of 30 per cent. as provided in rule 28. This offer appears to have bene made because the petitioner-firm were unable to furnish the details of the labour involved for execution of the works in question. In the absence of details the Assessing Authority would have been competent to make best judgment assessment and I see nothing wrong in the said officer accepting the said offer made by the assessee-firm. In S. B. Gurbaksh Singh v. Sales Tax Officer etc. (Civil Writ No. 540-D of 1959 decided on 29-4-1966; Since reported at [1966] 18 S.T.C. 500), I have already held that rule 28 is invalid, but in view of what I have said above the invalidity does not render the impugned order illegal.