Kashi Ornament House vs Commissioner of Trade Tax

Prakash Krishna, J.—In these four revisions, common questions of law and facts are involved. The assessment years involved are 1977-78, 1978-79, 1979-80 and 1980-81.

The applicant is carrying on the business of gold, jewellery, silver ornaments, etc. It is a registered dealer under the provisions of the U.P. Trade Tax Act, 1948 as also under the Central Sales Tax Act, 1956. In these years, the tax was levied u/s 3AAAA of the U.P. Trade Tax Act. The levy of tax was set aside by the Tribunal as in the meantime the aforestated section was declared "ultra vires" by this Court in Pioneer Tanneries & Glue Works, Kanpur v. State of Uttar Pradesh [1991] 83 STC 1 (All) : [1991] UPTC 585. Thereafter the aforestated section was amended with retrospective effect by U.P. Act No. 8 of 1992.

An application u/s 22 of the Act was filed before the Tribunal by the Department on the ground that in view of the amendment with retrospective effect carried on in the aforesaid section, the levy of tax is valid.

It may be noted that the apex court in the case of Hotel Balaji and others, Vs. State of Andhra Pradesh and others, etc. etc., has declared that the aforesaid provisions are a "valid piece of legislation". The Tribunal allowed the rectification application by the order under revision.

Heard Shri Piyush Agarwal learned Counsel for the applicant and the learned Standing Counsel for the Department.

The submission of the learned Counsel for the applicant is that under the amended section, an application could have been filed within the period of one year. Elaborating the argument he submits that since the application was not filed within the aforesaid period of one year, the application was barred by time.

Considered the above submission of the learned Counsel for the applicant, but it is difficult to agree with him.

It may be noted that the said section was declared a valid piece of legislation by the apex court. In view of the fact that the said section has been declared a valid piece of legislation, there was an error in the order of the Tribunal holding it ultra vires. The said mistake could have been and has been rectified u/s 22 of the U.P. Trade Tax Act. The controversy involved in the present case is squarely covered by a decision of this Court in Varanasi Auto Sales (Pvt.) Ltd. v. Commissioner of Sales Tax [2010] 28 VST 73 (App) (see below) : [2004] UPTC 837. In this case, after consideration of various cases including Commissioner of Trade Tax, U.P. v. Upper Doab Sugar Mills Ltd. [2008] 118 STC 422 (SC) : [2000] UPTC 496, which was heavily relied upon by Shri Piyush Agrawal, learned Counsel for the applicant, it has been held that even if Section 17 of the amending Act is not applicable, it cannot possibly be disputed that the levy of tax having been ultimately held to be valid, the order can be rectified u/s 22 of the principal Act which gives the power of rectification.

In view of above, there is no merit in the revisions. All the revisions are dismissed but no order as to costs.