1983 (4) TMI 241 - HC - VAT and Sales Tax

Summary

Issues:
1. Claim of deduction of turnover for sales returns beyond the prescribed time limit.
2. Interpretation of section 13(5) in relation to rule 5-B for granting relief.
3. Application of rule 5-B regarding the time limit for claiming adjustment or refund of tax.

Analysis:
The case involved manufacturers of steel castings claiming a deduction of turnover for sales returns beyond the stipulated time limit during the assessment for the year 1974-75. The assessing authority disallowed the claim, stating it was beyond the six-month period from the date of sales. The Appellate Assistant Commissioner and the Tribunal upheld this decision based on the provisions of rule 5-B of the Tamil Nadu General Sales Tax Rules, 1959. The Tribunal relied on a Full Bench decision and held that refunds cannot be granted after six months from the date of sales or after the final assessment date, whichever is later, as per rule 5-B. The assessees challenged this decision in the tax case.

The assessees argued that section 13(5) provides for a different relief than rule 5-A, which deals with deduction of turnover for sales returns. They contended that the Full Bench decision did not address the entitlement to claim adjustment of tax under section 13(5) and rule 5-B separately. However, the majority judgment of the Full Bench considered section 13(5) to cover both reliefs, including deduction of turnover and adjustment of tax for sales returns. Despite the interpretation suggested by the assessees' counsel, it was noted that the claim must adhere to the time limit specified in rule 5-B to qualify for relief under section 13(5).

Regarding the application of rule 5-B, it was emphasized that the claim for relief should have been made before the final assessment for the years in which the sales occurred or within six months from the sales date, whichever is later. In this case, the sales took place in 1972-73 and 1973-74, with final assessments conducted for those years. However, the claim for relief under section 13(5) was made in 1974-75, beyond the prescribed time limits. The Court concluded that the claim was not sustainable under rule 5-B and dismissed the tax case, with no order as to costs.