2020 (7) TMI 383 - MADRAS HIGH COURT - CST, VAT & Sales Tax

Head Note / Extract:
Reopening of assessment - rectification of mistake - error apparent on the face of record - Section 55 of the Tamil Nadu General Sales Tax Act, 1959 - exemption from payment of sales tax - Government vide G.O.Ms.No.528 Commercial Taxes and Religious Endowment Department dated 21.11.1997 - levy of penalty. Whether the power under Section 55 of the Act could have been invoked and Section 55 of the Act gives power to rectify any error apparent on the face of the record? - HELD THAT:- The intention of the Legislature was to grant power to the Assessing Officer or the Appellate Authority or the Tribunal to rectify its orders when there is an error apparent on the face of the record. Hence, the power under Section 55 of the Act cannot be used to review an order of assessment by reopening an assessment. Such power has not been conferred on the Authority under Section 55 of the Act - In the instant case, the Assessing Officer, while passing the revised assessment orders dated 28.7.2009, reviewed the earlier assessment orders, which is impermissible in law by invoking Section 55 of the Act. The mistake should be apparent on the face of the record. Only if all these features are available, the assessment can be reopened by invoking the power under Section 55 of the Act. Therefore, the revision of assessment dated 28.7.2009 is wholly without jurisdiction - Hence, the issue is decided in favour of the petitioners and against the Revenue. Whether the Tribunal was right in denying the benefit of exemption, largely, by referring to the decision of the Hon’ble Supreme Court in the case of COASTAL CHEMICALS LTD. VERSUS COMMERCIAL TAX OFFICER, AP AND OTHERS (AND OTHER APPEALS) [1999 (10) TMI 599 - SUPREME COURT] and the decision of the Kerala High Court in the case of TEAKTEX PROCESSING COMPLEX LIMITED VERSUS STATE OF KERALA [2002 (10) TMI 761 - KERALA HIGH COURT]? - HELD THAT:- In view of the factual position in the decision in the case of Coastal Chemicals Limited wherein the question involved was as to whether the natural gas fell within the meaning of the word 'consumables' in Section 5B(1) of the Andhra Pradesh General Sales Tax Act, 1957, based on which, the decision was rendered, we find, on facts, that the said decision cannot be of any assistance to the case of the Revenue. The most important aspect, which is to be noted, is that the exemption has been granted by the State Government for sale of certain items of goods to 100% EOUs in the State and the units located in Chennai Export Processing Zone. Therefore, the object of exemption is to promote exports. The Tribunal proceeded largely by examining as to what would be the meaning of the term ‘consumable’ and referred to the two decisions and held that though the carbide tip inserts lose their utility, they do not lose identity. The Tribunal should have interpreted the expression 'consumable goods’ and if the same is done, the nature of the goods supplied and whether the same gets consumed would be required to be examined. The exemption notification has to be interpreted in a strict manner without adding any words to it. As mentioned earlier, the object of the Legislature is to promote exports. Therefore, if viewed from the purchasers’ point of view, the carbide tool becomes useless after it loses its utility. So far as the sellers are concerned, on sale of the goods and use by the purchasers, if it loses its utility, it can no longer be termed as a tool or a cutting device. Hence, viewed from the angle of both the purchasers and the sellers, the carbide tip tools are to be treated as consumable goods and are entitled to the benefit of exemption - the issue is answered in favour of the petitioners. Revision allowed.