2018 (3) TMI 905 - HC - VAT and Sales Tax

Filing of returns - Section 3(4) of the TNVAT Act 2006 - according to the department the assessee is not eligible to file returns in Form-K under Section 3(4) of the TNVAT Act 2006 - Held that - in the case on hand when the total and taxable turnover has exceeded Rs. 50 Lakhs the dealer ought to have filed the returns in Form-I instead of Form K. Factum of inadvertently reporting the turnover exceeding Rs. 50 Lakhs has been considered both by the appellate authority and tribunal. Concurrent finding of fact has not been assailed by the appellant herein. Therefore when the turnover is below Rs. 50 lakhs submission of returns in Form K cannot be said to be erroneous. Department has not alleged any purchase or sales suppression. Taking note of Section 27 of the TNVAT Act 2006 the appellate authority has rightly held that revision of assessments cannot be made. Revision dismissed.

Summary

Issues Involved:
1. Eligibility of the dealer to file returns in Form-K under Section 3(4) of the TNVAT Act, 2006.
2. Validity of the revised assessment orders issued by the assessing officer.
3. Admissibility of audited statements at the appellate stage.
4. Compliance with the statutory requirement to inform the assessing officer within 7 days of exceeding the turnover threshold of Rs. 50 Lakhs.

Issue-wise Detailed Analysis:

1. Eligibility of the dealer to file returns in Form-K under Section 3(4) of the TNVAT Act, 2006:
The dealer, engaged in hardware sales, filed monthly returns in Form-K under Section 3(4) of the TNVAT Act for the years 2012-13 and 2013-14, reporting turnovers of Rs. 50,91,404/- and Rs. 38,87,434/- respectively. According to Section 3(4), a dealer can opt to file returns in Form-K if the total and taxable turnover is below Rs. 50,00,000/-. The department contended that since the dealer's turnover exceeded Rs. 50,00,000/-, they were ineligible to file returns in Form-K and should have filed in Form-I under Section 3(2).

2. Validity of the revised assessment orders issued by the assessing officer:
The assessing officer issued a revision notice on 30.09.2014, proposing to re-determine the turnover and apply a tax rate of 14.5% for the years 2012-13 and 2013-14. The dealer did not respond to the notice, resulting in the confirmation of the revised assessments. The tribunal noted that the dealer inadvertently reported a turnover of Rs. 50,91,404/- for 2012-13, while the actual turnover was Rs. 48,59,008/- as per the audited statement. The tribunal held that Section 27 of the TNVAT Act, 2006, which pertains to the assessment of escaped turnover, does not apply when a dealer opts for a compounded rate under Section 3(4).

3. Admissibility of audited statements at the appellate stage:
The tribunal observed that the audited statements were produced before the appellate authority, who did not record any adverse findings. Section 63(2) of the TNVAT Act allows the appellate authority to receive additional evidence if it is genuine and the failure to produce it earlier was beyond the dealer's control. The tribunal found no adverse comments from the appellate authority regarding the audited statements, thus accepting their validity.

4. Compliance with the statutory requirement to inform the assessing officer within 7 days of exceeding the turnover threshold of Rs. 50 Lakhs:
The department argued that the dealer should have informed the assessing officer within 7 days of exceeding the Rs. 50 Lakhs turnover threshold. However, the tribunal concluded that this issue did not arise because the turnover exceeding Rs. 50 Lakhs was inadvertently reported. The tribunal and appellate authority both found that the actual turnover was below Rs. 50 Lakhs, making the filing of returns in Form-K appropriate.

Conclusion:
The tribunal upheld the appellate authority's decision to set aside the revised assessment orders, noting that the dealer's actual turnover was below Rs. 50 Lakhs, and thus they were eligible to file returns in Form-K. The tribunal found no evidence of purchase or sales suppression and determined that the revision of assessments under Section 27 was not applicable. The High Court dismissed the tax case revisions, affirming the tribunal's decision and answering the substantial questions of law against the revenue.