2008 (8) TMI 805 - HC - VAT and Sales Tax

Whether the respondents can be treated as a dealer under section 2(r) of the Tamil Nadu General Sales Tax Act by the assessing officer since the assessees sold raw-rubber and rubber latex effected to the other States as inter-State sales? Held that - This court in a catena of decisions has consistently taken the view that if an earlier order is not appealed against by the Revenue and the same has attained finality then it is not open to the Revenue to accept the judgment/order on the same question in the case of one assessee and question its correctness in the case of some other assessees. In essence the Revenue cannot pick and choose. Therefore it is not as if the decision of the STAT had become final. This self-serving letter sent by the department cannot be taken note of by this court because the DCTO Thuckalay had passed a final order implementing the order passed by the Appellate Assistant Commissioner confirmed by the Tribunal and has also ordered for refund to the assessee which was also not denied by the State. If the department was sincere in filing an appeal they ought to have filed an appeal in the year 2004. It is not open to them to contend after four years before this court that they are still contemplating to file appeals especially without any reservation they have implemented the order and also ordered for refund which had also been paid to the assessee.

Summary

Issues:
1. Interpretation of the Tamil Nadu General Sales Tax Act regarding the classification of dealers.
2. Implementation of orders and appeals process by the State Department.
3. Application of the principle of non-discrimination and finality of judgments.

Analysis:
1. The High Court examined the interpretation of the Tamil Nadu General Sales Tax Act in the context of whether the respondents could be classified as dealers under section 2(r) of the Act. The dispute arose from the sale of raw rubber and rubber latex as inter-State sales. The Appellate Assistant Commissioner had initially allowed the transaction as exempt from tax, a decision upheld by the Tamil Nadu Sales Tax Appellate Tribunal (STAT) in a common order dated March 26, 2003. The Tribunal dismissed the appeals by the State, confirming the exemption for both M/s. Velimalai Rubber Company Ltd. and M/s. Vaikundam Rubber Company Ltd. The Court considered the arguments presented by both parties and the details of the transactions to determine the correct classification under the Act.

2. The Court delved into the implementation of orders and the appeals process by the State Department. The respondent's counsel argued that the Department's decision to implement the order in favor of one party without filing an appeal against the same common order in respect of another party was impermissible. Citing a judgment of the Supreme Court, the counsel emphasized that once an order attains finality, the Revenue cannot selectively challenge its correctness. The State Department's delay in filing an appeal, despite indicating an intention to do so, was scrutinized by the Court, especially considering the refund already issued to the assessee. The Court highlighted the principle that the Revenue cannot pick and choose which orders to contest, emphasizing the need for consistency in legal proceedings.

3. Applying the principle of non-discrimination and finality of judgments, the Court referred to binding precedents set by the Supreme Court. The Court underscored that the State, as the petitioner, cannot discriminate between different assessees in relation to a common order. Drawing from established legal principles, the Court reiterated that once an order against the Revenue becomes final, it is not permissible for the Revenue to challenge the same issue selectively across different cases. In light of the conduct of the respondents and the legal precedents cited, the Court dismissed all four writ petitions, emphasizing the importance of adhering to legal principles and maintaining consistency in legal proceedings.