1990 (8) TMI 383 - HC - VAT and Sales Tax

Issues Involved:
1. Disallowance of import sales.
2. Disallowance of credit notes issued in 1982-83 for invoices withdrawn relating to 1981-82.
3. Turnover not covered by form XVII declaration.

Detailed Analysis:

1. Disallowance of Import Sales:
The respondents disputed the disallowance of import sales amounting to Rs. 1,19,808.81 at 9%. The argument before the Tribunal was that evidence existed to prove that the imports were made after the Tamil Nadu Electricity Board placed orders, but this evidence was not produced earlier. The Tribunal found no evidence showing that all imported goods were sold exclusively to the Tamil Nadu Electricity Board. Consequently, the Tribunal remanded the matter to the assessing officer to allow the respondents to present the necessary evidence.

The Revenue contended that the matter should not be remanded solely to enable the assessee to adduce evidence. The respondents' counsel did not seriously dispute this contention, acknowledging that they failed to produce the evidence regarding import sales initially.

2. Disallowance of Credit Notes:
The respondents challenged the disallowance of credit notes issued in 1982-83 for sales related to 1981-82, arguing that fresh invoices were issued for returned goods, thus nullifying the sales. The lower authorities disallowed the claim under sections 4-C and 4-D of the Tamil Nadu General Sales Tax Act, citing the claim was barred by limitation. The Tribunal held that turnover cannot be taxed unless the sale is completed or fructified and remanded the issue to the assessing officer.

The Revenue argued that the claim under sections 4-C and 4-D was clearly barred by limitation, and thus, remand was unnecessary. The respondents' counsel argued that sections 4-C and 4-D relate to the refund of tax paid by the dealer, subject to a time limit. They contended that the credit notes for the withdrawal of invoices should have been excluded when fixing the turnover for 1981-82, referencing section 2(r) of the Act and rule 5-A of the Rules.

The court, impressed by the arguments, sustained the order of remand for reasons different from those given by the Tribunal. The assessing officer was directed to consider whether the deductions can be allowed in the assessment year 1981-82.

3. Turnover Not Covered by Form XVII Declaration:
The respondents argued that they could not file form XVII declarations with the A-1 return in time but could do so before the final assessment, referencing the decision in State of Tamil Nadu v. Arulmurugan and Company. The Tribunal accepted this plea and remanded the issue to the assessing officer to verify the form XVII declarations.

The Revenue contended that the decision in State of Tamil Nadu v. Arulmurugan and Company does not apply to form XVII declarations, which must be filed within the prescribed time without provision for extension. The respondents' counsel relied on multiple judgments, including Commissioner of Agricultural Income-tax v. V.N. Narayanan Bhattadiripad and Commissioner of Sales Tax v. Minimax Ltd., arguing that the appellate authority has the same powers as the assessing authority and can accept late declarations.

The court concluded that "any time before the final assessment of the accounts for that year" includes assessments by both the assessing and appellate authorities. The court referenced the judgment in State of Tamil Nadu v. Electronics Trade and Technology Development Corporation Ltd., which applied the ratio in State of Tamil Nadu v. Arulmurugan and Company to the belated filing of form XVII declarations. Consequently, the remand order to enable the assessee to file form XVII declarations was sustained.

Conclusion:
The tax case was allowed in part, setting aside the order of remand concerning the import sales but sustaining the remand order for the disallowance of credit notes and the belated filing of form XVII declarations. There was no order as to costs.

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