1973 (2) TMI 129 - HC - VAT and Sales Tax

Summary

Issues:
1. Whether the petitioner can withdraw the option under section 7 of the Tamil Nadu General Sales Tax Act after the assessment is made?
2. Whether the tax payable under section 7 and section 5 of the Act can be considered independent and not subject to equitable considerations?
3. Whether the option once exercised under section 7 can be varied by the assessee until the tax is paid under the local Sales Tax Act?

Analysis:
1. The petitioner, a dealer in toys, opted for payment of local sales tax under section 7 for the assessment year 1966-67. However, upon discovering that this option would result in higher tax liability due to inter-State purchases, the petitioner sought to withdraw the option after a provisional assessment was made. The court held that the petitioner cannot revoke the option after filing returns, as per the rules prescribed, and must do so before or at the time of filing the returns. The failure to revoke the option in a timely manner led to the petitioner being bound by the original choice, resulting in the tax liability as demanded under the revised notice. The court dismissed the contention that the option could be withdrawn at any time before payment of tax, emphasizing the importance of adhering to the prescribed rules regarding the revocation of the option.

2. The petitioner contended that the tax liability under section 7 and section 5 should be considered independent and not subject to equitable considerations. The court referred to previous judgments stating that these charges are separate and independent, thus precluding any equitable relief in such circumstances. Despite the petitioner's argument that he was prejudiced due to a change in the law after exercising the option, the court held that tax courts do not entertain equitable considerations in tax matters. The court emphasized that the petitioner must bear the consequences of the legal framework, even if it results in additional tax liability.

3. The petitioner argued that the option under section 7 should be capable of variation until the tax is paid under the local Sales Tax Act. However, the court rejected this contention, stating that the concession granted under section 7 is subject to the rules outlined, including the provision for revocation before or at the time of filing returns. The court highlighted the importance of adhering to the prescribed procedures and timelines for revoking the option, noting that attempting to do so after the specified period would not be effective. As the petitioner failed to revoke the option within the prescribed timeframe, the court held that he could not claim the right to vary the option at a later stage, particularly after filing returns.

In conclusion, the court dismissed the petitioner's writ petition, noting that he had not availed himself of the alternative remedy of appealing before the Sales Tax Appellate Tribunal. The court found no grounds to challenge the relevant provisions of the Tamil Nadu General Sales Tax Act and ruled against the petitioner on all contentions, ultimately dismissing the petition with costs.