Tax Management India. Com
                        Law and Practice: A Digital eBook ...

Category of Documents

TMI - Tax Management India. Com
Case Laws Acts Notifications Circulars Classification Forms Manuals SMS News Articles
Highlights
D. Forum
What's New

Share:      

        Home        
 

TMI Blog

Home List
← Previous Next →

2019 (11) TMI 423

..... f the Tamil Nadu General Sales Tax Act 1959 - service of SCN - Notice dated 02.03.2007 had been issued though served on the assessee/petitioner on 11.05.2007 - petitioner objected to the preassessment process on 21.05.2007 relying both on the expedited process of assessment set out under Section 12 C and seeking a personal hearing prior to conclusion of assessment proceedings - principles of natural justice. HELD THAT:- The question of suppression does not merely mean a difference in the interpretation of law vis-a-vis the petitioner and the respondent. In the present case, it is a legal dispute as to whether the transaction in question constitutes works contract, taxable at 4% or sale of equipment, taxable at 20%. Though the Assessing Authority, in the present case, has proceeded to assess the transaction as sale of equipment, taxable at the rate of 20%, that by itself cannot lead to an inference of suppression and a bonafide difference of opinion on the interpretation of a taxing statute cannot be ruled out. In the facts and the circumstances of the present case, particularly bearing in mind that no personal hearing has been granted to the petitioner, I am inclined to set aside t .....

X X X X X X X

Full Text of the Document

X X X X X X X

..... g with no reply, hence prompting the assessee to approach this Court by way of the present Writ Petitions. The assessee has prima facie discharged the burden cast upon it to establish that the transactions in question constitute branch transfers and nothing further. The Assessing Authority has, on the other hand, not conclusively established suppression in order to take the present assessment out of the ambit of Section 12 C - impugned order as well as SCN set aside. Validity of orders of assessment dated 16.01.2007 passed in terms of the provisions of the Tamil Nadu General Sales Tax Act, 1959 - HELD THAT:- Orders of assessment in respect of the periods 2002-03 and 2005-06 are placed on file to establish that identical claims of exemption have been made by the petitioner for the previous and later years and the Assessing Authority has, on an examination of relevant documents, accepted the claim for exemption. The conclusion of the Assessing Authority turns on the position that the petitioner has not supplied cotton yarn for export but has, in fact, supplied cloth manufactured from out of the cotton yarn, for export. Learned counsel for the Revenue is unable to produce a copy of th .....

X X X X X X X

Full Text of the Document

X X X X X X X

..... ion 12C as well as Rule 15(5-E) of the Tamil Nadu General Sales Tax Rules (in short 'Rules'). 4. The provisions of Section 12C and Rule 15(5-E) being critical to the appreciation of the issues that arise in this writ petition, are extracted below: Section 12-C '12-C. Assessment of sales in certain cases- (1) Notwithstanding anything contained in this Act but subject to the provisions of section 16, the assessment of a dealer in respect of the assessment for the period prior to the 1st day of April 2006 shall be on the basis of the return relating to his turnover and on the basis of the declaration or certificate as may be prescribed, furnished on or before the 31st March 2007 and such return shall be accepted without requiring the presence of the dealer or production of books of accounts by the dealer subject to such conditions as may be prescribed: Provided that this sub-section shall not apply to a dealer who has filed an appeal or other proceeding in respect of any assessment for the period referred to in this sub-section and is pending before the High Court or the supreme Court, as the case may be. (2) Every dealer who claims to be not liable to pay tax and has not .....

X X X X X X X

Full Text of the Document

X X X X X X X

..... ions are issued: (1) The assessing authorities should pass deemed assessment orders in all the cases where the prescribed returns have been filed and declaration forms and certificates submitted in support of their claim of exemption or concessional rate of tax. (2) The assessing authorities should sort out the assessment files where there is no need to file saleable forms differentiated from the files involving saleable forms. (3) Wherever no saleable forms are involved, they have to pass orders accepting the turnovers reported by the dealers. Even if there is mistake / error in a return, they should pass orders without calling for accounts. Thereafter, they can revise the order, wherever necessary. (4) Wherever the declaration forms or certificates prescribed have not been submitted, notices must be issued immediately by disallowing the concessional rate of tax / exemption specifying the date (within 90 days) before which the records should be filed. (5) In case the forms and declarations were not filed within the stipulated time, orders should be passed disallowing the claim of concessional rate of tax / exemption. (6) If the declaration forms or certificates are produced subseq .....

X X X X X X X

Full Text of the Document

X X X X X X X

..... quest in the following terms: 'Request to complete the assessment under Sec.12-C According to sub Rule 5(5) (6) of Rule 15 the relevant year of assessment should not be the first or last year of business and according to Sub Rule 5(E) (3) of Rule 15 during the relevant assessment year the dealer should not have attempted to cancel or suppress tax liability of more than twenty five thousand rupees. In this case the dealers had commenced their business in Oct'04 i.e. during the assessment year only. Further more the Enforcement wing officers during the course of their inspection on 27.7.05 noticed tax suppression. In view of the above, their assessment cannot be completed under section 12 C of the Act, as the conditions stipulated in the act and also the circular instructions of the commissioner of Commercial Taxes, Chennai are not fulfilled by the dealers. Hence they are not eligible to be assessed under section 12 (c) of the Act' 11. It is not disputed that the dealer in this case has commenced business in October, 2005, as rightly stated by the Assessing Authority. Thus clause (6) under Rule 15 (5-E), that excludes assessments for the first or last year of business fro .....

X X X X X X X

Full Text of the Document

X X X X X X X

..... de difference of opinion on the interpretation of a taxing statute cannot be ruled out. 15. In the facts and the circumstances of the present case, particularly bearing in mind that no personal hearing has been granted to the petitioner, I am inclined to set aside the assessments, to be re-done de novo for both periods 2004-05 and 2005-06, on merits. 16. This order is passed bearing in mind that we are today in 2019, and the scheme of expedited assessment proceedings under Section 12C has long since elapsed. The need of the hour is to bring in finality to long pending assessments and this can best be achieved by avoiding technical distractions and instead focusing on substantive matters. 17. The assessee shall appear before the Assessing Authority on 30.10.2019 at 10.30. a.m.. No further notice need be issued in this regard. The Assessing Authority shall after hearing the petitioner and considering all materials that may be placed by it, pass orders of assessment de novo and on merits within a period of four (4) weeks from date of conclusion of personal hearing. 18. These Writ Petitions are allowed in the aforesaid terms. W.P.Nos.11364 to 11366 of 2007: 19. These Writ Petitions rel .....

X X X X X X X

Full Text of the Document

X X X X X X X

..... been pending with no reply, hence prompting the assessee to approach this Court by way of the present Writ Petitions. 23. In counter, the Assessing Authority relies on the provisions of Rule 15 (5-E) alleging suppression on the part of the petitioner and hence justifying the non-applicability of Section 12 C for the periods of assessment in question. 24. According to the Assessing Authority, the petitioner has disguised taxable turnover as stock transfers and this would amount to suppression in terms of Rule 15(5-E). The relevant provisions have already been extracted elsewhere in this order and I do not again extract the same for the sake of brevity. Suppression for the purposes of Rule 15(5-E), has to be seen to have been established beyond reasonable doubt by the Assessing Authority, to enable him to take a view that the provisions of Section 12 C are inapplicable. 25. The allegation in the present cases is that the petitioner has disguised taxable transactions under central excise as branch transfers. The petitioner has admittedly carried on a consistent modus operandi of running its business. Branch transfers were being effected to its depot in Kerala from where they are sold .....

X X X X X X X

Full Text of the Document

X X X X X X X

..... ee's factory to the branch office outside the state. It has also held that the local sales tax had been paid on the local sales effected in the states where the assessee maintained depots. The essential ingredients of the contract of sale pursuant to which the goods could be said to have been moved being, absent and the existence of such a contract also not having been inferred from the proved facts. It is not possible to accept the contentions for the Revenue that the transactions though subject to sales tax in other States as local sales were nevertheless inter-state sales. 3. We, therefore, do not find any merit in these revision petitions which concern the assessment on the assessee for the assessment year 1980-81. The tax cases are dismissed.' 27. While the Assessing Authority is always at liberty to establish the truth of the matter, the aspect of quantitative identity will not be the sole determinative factor in deciding upon the veracity of inter-branch transfers. Moreover, the assessee has also pointed out that even in the previous year i.e., for the period 2001-02, an identical query was raised by the Assessing Authority and a conclusion arrived at as in the prese .....

X X X X X X X

Full Text of the Document

X X X X X X X

..... is to orders of assessment dated 16.01.2007 passed in terms of the provisions of the Tamil Nadu General Sales Tax Act, 1959 (in short, 'TNGST Act') as well as under Central Sales Tax Act, 1956 (in short 'CST Act') for the assessment period 2004-05. The petitioner manages a spinning mill and has been claiming exemption on the sale of cotton yarn sold to exporters, upon the petitioner producing proof of export by the registered exporters by way of requisite documents, such as, Declaration in Form H, Bill of Lading and other documents establishing export. 34. The Assessing Authority appears to have accepted the claim of exemption for all assessment periods upto 2003-04 and subsequently as well. Orders of assessment in respect of the periods 2002-03 and 2005-06 are placed on file to establish that identical claims of exemption have been made by the petitioner for the previous and later years and the Assessing Authority has, on an examination of relevant documents, accepted the claim for exemption. However, in the impugned order of assessment, while rejecting the claim, the Assessing Authority states as follows: 'As regards pre export sales the dealers filed xerox c .....

X X X X X X X

Full Text of the Document

X X X X X X X

..... ation to which I have already made reference. The fact that the petitioner has indeed supplied manufactured cotton is not denied by it. However, the interpretation of the G.O. by Assessing Authorities has all along, been in favour of the petitioner. I am thus inclined to accept the case of the petitioner, simply on the anvil of consistency. Moreover, the Commissioners' Clarification is dated 29.11.2006, and has not, admittedly been supplied either to the assessee at the time of assessment or to the Court despite a specific request. On the facts and circumstances of this case as I have noticed earlier, it cannot be made to apply for a prior period, i.e., assessment period 2004-05, when, in fact, even for period 2005-06, the Assessing Officer has accepted the petitioners' claim for exemption under identical circumstances. 37.Though a ground has been raised questioning the validity of the present assessment in the light of Section 12 C of the TNGST Act, this ground is given up by the learned counsel for the petitioner in the course of the hearing. 38. In the light of the aforesaid discussion, the impugned orders are set aside. These Writ Petitions are allowed. - CST, VAT & Sal .....

X X X X X X X

Full Text of the Document

X X X X X X X

 

 

← Previous Next →

 

 

|| Home || About us || Feedback || Contact us || Disclaimer || Terms of Use || Privacy Policy || Database || Members || Refer Us ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.
|| Blog || Site Map - Recent || Site Map ||