Case: Commissioner of Sales Tax, U.P Vs. Sarjoo Prasad Ram Kumar

HEGDE, J.1. This appeal by special leave arises from the decision of the Allahabad High Court in a reference under section 11 of the U.P. Sales Tax Act (hereinafter referred to as the Act).2. The facts of this case lie within a narrow compass. Lucknow is one of the circles formed under the Act. In that circle there are several Assistant Sales Tax Officers. The assessee-respondent carries on his business in Section III for which sector there is a separate Assistant Sales Tax Officer. For the assessment year 1959-60, the Assistant Sales Tax Officer, Sector II, issued to the assessee a notice under section 21 of the Act. That notice was served on the assessee on January 17, 1961. After giving an opportunity to the assessee to put forward his case, the Assistant Sales Tax Officer assessed the assessee on a turnover of Rs. 18, 000. The assessee preferred an appeal against that order to the Assistant Commissioner (Judicial), Sales Tax. Before that officer, he contended that the Assistant Sales Tax Officer, Sector II, had no jurisdiction to assess him. That contention was upheld by the appellate authority. That authority came to the conclusion that the only Sales Tax Officer who would have assessed the assessee was the Assistant Sales Tax Officer, Sector III. He accordingly set aside the assessment.3. Aggrieved by that order, the department went up in appeal to the Judge (Revisions), Sales Tax. The Judge (Revisions), Sales Tax, affirmed the decision of the appellate authority. As demanded by the department, the Judge (Revisions), Sales Tax, stated the following question for ascertaining the opinion of the High Court :"Whether, under the circumstances of this case, the assessment passed by the Assistant Sales Tax Officer, Sector II, was a valid assessment or a void one without jurisdiction ?"The High Court answered that question in favour of the assessee. It came to the conclusion that the assessment in question was void as the Assistant Sales Tax Officer, Sector II, had no jurisdiction to assess the assessee. The department is challenging that conclusion.4. In order to pronounce on the controversy in this case, it is necessary to refer to certain provisions of the Act and the Rules framed thereunder. Section 2(a) of the Act defines the assessing authority thus : "assessing authority means any person authorised by the State Government to make any assessment under this Act". Now we turn to the Rules framed under the Act. Rule 2(h) defines the Sales Tax Officer as "Sales Tax Officer means a Sales Tax Officer of a circle appointed by the State Government to perform the duties and exercise the powers of an assessing authority in such circle, and includes an Assistant Sales Tax Officer appointed by the Commissioner, Sales Tax, for such circle, and also includes an officer appointed under rule 3-A of these Rules". If these provisions had stood by themselves there would have been no difficulty in holding that whenever a Sales Tax Officer or an Assistant Sales Tax Officer is appointed to a circle he would have jurisdiction to assess all the dealers in that circle. But then sub-rule (3) of rule 3 provides : "Where there are more than one Sales Tax Officer in a circle, the Commissioner of Sales Tax (hereinafter called the Commissioner) shall determine their respective jurisdiction within such circle". Now we may turn to rule 6(a), which says : "The Sales Tax Officer shall be the assessing authority in respect of the dealers carrying on business within the limits of his jurisdiction."5. From the foregoing provisions, it is clear that though it is for the Government to appoint a Sales Tax Officer for a circle, power has been conferred on the Commissioner, in those cases, where there are more than one Sales Tax Officer in a circle to demarcate the jurisdiction of each Sales Tax Officer. That is what has been done in the present case. In view of that demarcation, the Assistant Sales Tax Officer, Sector II, cannot be held to have had any jurisdiction to assess the respondent.In the present case, it is not disputed that in the Lucknow Circle there are several Assistant Sales Tax Officers. It is also not disputed before us that Sector III has a separate Assistant Sales Tax Officer. It is not shown that the Assistant Sales Tax Officer, Sector II, had also been conferred with jurisdiction to assess the dealers in Sector III. In these circumstances, the only possible conclusion is that the Assistant Sales Tax Officer, Sector II, had no jurisdiction to assess the dealers in Sector III.6. In the High Court, the department contended that the assessees case was transferred from the file of the Assistant Sales Tax Officer, Sector III, to the file of the Assistant Sales Tax Officer, Sector II. This contention has been rejected by the High Court as having no basis. In fact, that contention has not been repeated before us. Mr. Karkhanis, appearing for the department, contended that in view of the provisions referred to earlier, we must hold that all the Assistant Sales Tax Officers in Lucknow Circle had jurisdiction to assess all the dealers in Lucknow Circle. This contention is unacceptable. If we accept that contention, sub-rule (3) of rule 3 becomes otiose. Further rule 6(a) also becomes ineffective. It is for obvious reasons the rule-making authority has empowered the Commissioner to allocate separate areas for separate Assistant Sales Tax Officers. When such an allocation is made, the jurisdiction of each officer is confined to the area allotted to him.7. The only other contention advanced by Mr. Karkhanis is that the assessee having not taken any objection as to the jurisdiction before the assessing authority he is precluded from raising that objection at a later stage. This contention is again unacceptable to us. Herein we are concerned with the question of jurisdiction. Unless there is some provision either in the Act or in the Rules framed which precludes the assessee from raising any objection as to jurisdiction, if the same is not raised before the assessing authority, the assessee cannot be precluded from raising that objection at a later stage. An objection as to jurisdiction goes to the root of the case.Mr. Karkhanis placed some reliance on the decision of the Full Bench of the Allahabad High Court in Shyam Manohar Dixit v. Sales Tax Officer, Sector IV, Kanpur [[1970] 26 S.T.C. 439 (F.B.)]. In that case the jurisdiction conferred on the assessing authority under rule 3(3) included also the locality in which the dealer in question was carrying on business.8.

Decision:
0[ds]From the foregoing provisions, it is clear that though it is for the Government to appoint a Sales Tax Officer for a circle, power has been conferred on the Commissioner, in those cases, where there are more than one Sales Tax Officer in a circle to demarcate the jurisdiction of each Sales Tax Officer. That is what has been done in the present case. In view of that demarcation, the Assistant Sales Tax Officer, Sector II, cannot be held to have had any jurisdiction to assess the respondent.In the present case, it is not disputed that in the Lucknow Circle there are several Assistant Sales Tax Officers. It is also not disputed before us that Sector III has a separate Assistant Sales Tax Officer. It is not shown that the Assistant Sales Tax Officer, Sector II, had also been conferred with jurisdiction to assess the dealers in Sector III. In these circumstances, the only possible conclusion is that the Assistant Sales Tax Officer, Sector II, had no jurisdiction to assess the dealers in Sectorthe High Court, the department contended that the assessees case was transferred from the file of the Assistant Sales Tax Officer, Sector III, to the file of the Assistant Sales Tax Officer, Sector II. This contention has been rejected by the High Court as having no basis. In fact, that contention has not been repeated before us.Mr. Karkhanis, appearing for the department, contended that in view of the provisions referred to earlier, we must hold that all the Assistant Sales Tax Officers in Lucknow Circle had jurisdiction to assess all the dealers in LucknowCircle. This contention is unacceptable. If we accept that contention,(3) of rule 3 becomes otiose. Further rule 6(a) also becomes ineffective. It is for obvious reasons theauthority has empowered the Commissioner to allocate separate areas for separate Assistant Sales Tax Officers. When such an allocation is made, the jurisdiction of each officer is confined to the area allotted toy other contention advanced by Mr. Karkhanis is that the assessee having not taken any objection as to the jurisdiction before the assessing authority he is precluded from raising that objection at a later stage.This contention is again unacceptable to us. Herein we are concerned with the question of jurisdiction. Unless there is some provision either in the Act or in the Rules framed which precludes the assessee from raising any objection as to jurisdiction, if the same is not raised before the assessing authority, the assessee cannot be precluded from raising that objection at a later stage. An objection as to jurisdiction goes to the root of the case.Mr. Karkhanis placed some reliance on the decision of the Full Bench of the Allahabad High Court in Shyam Manohar Dixit v. Sales Tax Officer, Sector IV, Kanpur [[1970] 26 S.T.C. 439 (F.B.)]. In that case the jurisdiction conferred on the assessing authority under rule 3(3) included also the locality in which the dealer in question was carrying on business.