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2015 (7) TMI 387 - HC - VAT and Sales TaxPrinciple of res judicata in taxation - Rate of VAT on Noodles - 4% or 12.5% - Classification - Covered by Entry 9(3) of Schedule I or Entry No.87 of Schedule II to the Gujarat Valued Added Tax Act - whether sale of Maggi, Noodles equating it to “Farsan” sold as branded product - Validity of order passed beyond the scope of show cause notice (SCN) - Held that:- there cannot be any dispute that generally, the principle of res judicata would not be applicable to Tax Laws as every year is a separate unit. However, it is required to be noted that the same would not be applicable in a case where the issue with respect to classification and/or Entry is interpreted by higher forum and the same had attained finality, inasmuch as the same is not challenged and the decision of the higher forum has been followed consistently for number of years, unless there are change circumstances in the subsequent assessment years. Even in case, where the officer and/or authority is of the opinion that the earlier decision though not challenged and/or even implemented for years is not a good decision and/or not in the interest of the revenue, the revenue is not remediless. However, as observed hereinabove, the Assessing Officer being lower in rank cannot be permitted to ignore and/or cannot be permitted to take a contrary view than the view taken by the higher forum, more particularly, when in the subsequent years, there are no change circumstances and the decision of the higher forum (in the present case, learned Tribunal), has been acted upon and implemented for the years. The impugned order passed by the Assessing Officer cannot be sustained, as the same is beyond the scope and ambit of the show cause notice dated 30.8.2012. It is required to be noted that by show cause notice dated 30.8.2012, the petitioner was called upon to show cause why “Maggi Noodles” shall not be treated as “Farsan and Eatables” (except sold in sealed container under a brand) falling under Entry 22 and liable to be taxed at 4%. However, by impugned order, the adjudicating authority has passed the impugned order holding that product “Maggi Noodles” would fall within Entry 87 (Residuary Entry) and liable to be taxed at 12.5% plus additional duty. Under the circumstances also, the impugned order cannot be sustained. Decided in favor of assessee on technical grounds.
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