1979 (2) TMI 188 - HC - VAT and Sales Tax

Summary

Issues:
1. Assessment of sales tax on jaggery by the assessing authority under the Central Sales Tax Act, 1956.
2. Exemption of jaggery from sales tax under the Central Sales Tax Act based on a notification dated 12th December, 1957.
3. Rectification of assessment and refund of tax paid by the petitioner under the Tamil Nadu General Sales Tax Act, 1959.
4. Application of rule 5(9) of the Central Sales Tax (Tamil Nadu) Rules, 1957 for rectification.
5. Interpretation of the rectification petition filed by the petitioner under section 55 of the Tamil Nadu General Sales Tax Act, 1959.
6. Jurisdiction of the authorities to rectify the assessment order based on the notification exempting jaggery from sales tax.
7. Effect of the decision in M. Ishwarlal & Co. v. State of Madras[1973] 32 S.T.C. 377 on the assessment of sales tax on jaggery.
8. Timeliness of the rectification petition filed by the petitioner.
9. Impact of the petitioner's previous writ petition on the assessment for the year 1967-68.

Analysis:
The writ petition challenged the assessment of sales tax on jaggery by the assessing authority for the assessment year 1967-68 under the Central Sales Tax Act, 1956. The petitioner claimed that jaggery was exempt from tax based on a notification dated 12th December, 1957, issued under the Central Sales Tax Act. The assessing authority's order was challenged through a rectification petition under the Tamil Nadu General Sales Tax Act, seeking refund of the tax paid. The petitioner argued that rule 5(9) of the Central Sales Tax (Tamil Nadu) Rules, 1957, allowed for rectification, which was applicable at the time of filing the petition. The court held that the rectification petition, although mentioning only section 55 of the Tamil Nadu General Sales Tax Act, should have been considered under rule 5(9) of the Rules in force at that time.

The court considered the impact of the decision in M. Ishwarlal & Co. v. State of Madras[1973] 32 S.T.C. 377, which clarified the exemption of jaggery from sales tax under the Central Sales Tax Act. The petitioner's rectification petition was found to be timely filed within the five-year limit from the assessment order. The court emphasized that the assessing authority erred in not considering the exemption provision while assessing the petitioner. Despite the petitioner's previous writ petition concerning a different assessment year, the court allowed the rectification petition, quashed the orders of the authorities, and canceled the assessment made on the petitioner, granting costs to the petitioner.

The court rejected the respondents' arguments regarding the necessity to raise the tax liability issue before the assessing authority, emphasizing the petitioner's right to rectify the error based on the legal position established in the M. Ishwarlal case. The court clarified that the rectification petition's timeliness and the specific assessment year mentioned in the previous writ petition did not preclude rectification within the allowed timeframe. The judgment highlighted the importance of considering the legal provisions and court decisions in assessing tax liabilities and allowing rectification petitions for errors in assessments.