1991 (4) TMI 419 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Classification of "submersible electrical pumps" under the Tamil Nadu General Sales Tax Act, 1959.
2. Applicability of the concessional tax rate under G.O. No. 1064, Revenue, dated June 9, 1967.
3. Validity of reopening and revising completed assessments.
4. Application of the doctrine of promissory estoppel.

Detailed Analysis:

1. Classification of "submersible electrical pumps" under the Tamil Nadu General Sales Tax Act, 1959:
The primary issue was whether "submersible electrical pumps" fall under item 41 or item 99 of the First Schedule to the Tamil Nadu General Sales Tax Act, 1959. Item 41 pertains to "all kinds of electrical goods," while item 99 covers "power driven pumps (including motor pumps, turbo pumps and monoblock pumpsets) for liquids." The court noted that submersible electrical pumps are power-driven and operate on electricity, making them suitable for classification under item 99. The court emphasized that "electrical goods" in item 41 should be understood in common parlance and not include items covered by other specific entries in the Schedule. Therefore, submersible electrical pumps, being power-driven, were rightly classified under item 99.

2. Applicability of the concessional tax rate under G.O. No. 1064, Revenue, dated June 9, 1967:
The concessional tax rate under G.O. No. 1064 was applicable only to goods falling under item 41 of the First Schedule. Since the court determined that submersible electrical pumps fall under item 99, the concessional rate was not applicable. The court held that the assessing authority and the Appellate Assistant Commissioner were correct in not extending the benefit of the concessional rate to the assessee.

3. Validity of reopening and revising completed assessments:
The court examined the legality of reopening and revising completed assessments under section 55 and section 16(1)(b) of the Act. It was noted that these provisions allow reassessment if the turnover was assessed at a lower rate than applicable. The court found that the reassessment by the authorities was justified as the original assessments were based on a mistaken view of law, treating the goods under item 41 instead of item 99.

4. Application of the doctrine of promissory estoppel:
The Tribunal had applied the doctrine of promissory estoppel, arguing that the assessee was led to believe that the concessional rate was applicable. However, the court held that the doctrine of promissory estoppel could not override statutory provisions. The court emphasized that there can be no estoppel against a statute, and the provisions of section 55 and 16(1)(b) of the Act allowed for reassessment. Thus, the Tribunal's reliance on promissory estoppel was misplaced and irrelevant.

Conclusion:
The court concluded that submersible electrical pumps fall under item 99 of the First Schedule and not under item 41. Consequently, the concessional rate under G.O. No. 1064 was not applicable. The reassessment of tax liability by the authorities was upheld as valid, and the doctrine of promissory estoppel was deemed inapplicable. The court allowed the tax revision filed by the State, set aside the Tribunal's order, and restored the Appellate Assistant Commissioner's order. The petition was allowed with no order as to costs.