2017 (3) TMI 1939 - HC - VAT and Sales Tax

Validity of Notices under Sections 25 26 55 and 61 of the Rajasthan Value Added Tax 2003 apart from assessment order - few petitions were filed at the stage of notices under Sections 25 or 26 of the Act of 2003 whereas other petitions were filed after order of assessment pursuant to the notice under challenge. HELD THAT - It would not be appropriate for this Court to deal with the issues raised in reference to the notices under Sections 25 and 26 of the Act of 2003 as all those issues can be raised before the Appellate Authority having been decided by the Assessing Authority. The petitioners had raised all the relevant issues before the Assessing Authority and the order of assessment has been passed after considering those issues thus in the facts and circumstances of the case there are no reason to set aside the impugned notices or the orders of assessment rather it can be challenged by way of appeal. The limitation to prefer appeal has already expired thus it would be appropriate to give liberty to the petitioners to prefer an appeal against the order of assessment within a period of 60 (sixty) days from the date of pronouncement of this judgment and in that case issue of limitation would not come in their way as agreed by learned counsel for the respondents. The direction aforesaid has been given on an agreement of learned counsel for the respondents as otherwise the period of limitation to maintain appeal is of 60 days from the date of assessment order. All these writ petitions are dismissed.

Summary

Issues Involved:
1. Challenge to Notices under Sections 25, 26, 55, and 61 of the Rajasthan Value Added Tax, 2003.
2. Assessment orders based on the judgment of the Supreme Court in Nokia India Private Limited.
3. Legality of reassessment based on a subsequent Supreme Court judgment.
4. Composite pack taxation and separate taxation of accessories.
5. Availability and adequacy of alternative remedies under the Act.

Detailed Analysis:

1. Challenge to Notices under Sections 25, 26, 55, and 61 of the Rajasthan Value Added Tax, 2003:
The petitioners, consisting of mobile and laptop companies, challenged the notices issued under Sections 25, 26, 55, and 61 of the Rajasthan Value Added Tax, 2003. The challenge was based on various grounds, including the assertion that the notices were issued in reference to the Supreme Court's judgment in the case of Nokia India Private Limited, which dealt with the separate taxation of battery chargers.

2. Assessment Orders Based on the Judgment of the Supreme Court in Nokia India Private Limited:
The petitioners argued that the judgment in Nokia India Private Limited should not be applied to their cases as it was given with the consent of the parties involved and pertained only to battery chargers, not other accessories. They contended that the assessment orders were passed based on a composite pack of mobile phones, batteries, and chargers, which were taxed at a single rate. The petitioners claimed that the reassessment notices were issued without proper grounds for "reasons to believe" as required under the Act.

3. Legality of Reassessment Based on a Subsequent Supreme Court Judgment:
The petitioners cited the Supreme Court's judgments in CIT v. Kelvinator of India and STO v. Uttareswari Rice Mills, which discussed the concept of "change of opinion" and "reason to believe." They argued that the reassessment notices were issued based on a change of opinion rather than any new material evidence, making the notices legally unsustainable.

4. Composite Pack Taxation and Separate Taxation of Accessories:
The petitioners contended that mobile phones sold in a composite pack, including batteries and chargers, should be taxed as a single unit. They argued that separate taxation of accessories was not warranted unless they were sold separately. The petitioners also challenged the valuation of chargers and other accessories, asserting that no separate consideration was taken for these items when sold as part of a composite pack.

5. Availability and Adequacy of Alternative Remedies Under the Act:
The respondents argued that the petitioners had an efficacious alternative remedy of appeal under the Rajasthan Value Added Tax Act, 2003. They contended that the petitioners should have availed this remedy instead of filing writ petitions. The court noted that the petitioners had raised all relevant issues before the Assessing Authority, which had passed assessment orders after considering those issues. Therefore, the court found no reason to set aside the impugned notices or the assessment orders, directing the petitioners to prefer an appeal within 60 days from the date of the judgment.

Conclusion:
The court dismissed the writ petitions, directing the petitioners to avail the alternative remedy of appeal. The court emphasized that the issues raised could be adequately addressed by the Appellate Authority and that the judgment would not prejudice either party in the appeal process. The petitioners were given liberty to file an appeal within 60 days, with the period of limitation being waived as agreed by the respondents.