1995 (2) TMI 367 - HC - VAT and Sales Tax

Summary

Issues:
1. Challenge to notice for production of books of accounts and evidence
2. Claim of exemption from sales tax on finished products and purchase of raw materials under Assam Industrial Policy, 1991
3. Delay in issuance of declaration forms for purchase of raw materials
4. Dispute regarding liability to sales tax on finished products

Analysis:

1. The petitioner challenged a notice from the assessing officer dated August 11, 1994, requesting the production of books of accounts and evidence. The petitioner sought a declaration that they are not liable to sales tax on finished products and on the purchase of raw materials under the Assam Industrial Policy, 1991.

2. The petitioner claimed exemption from sales tax on finished products and raw materials under the Assam Industrial Policy, 1991, supported by an eligibility certificate. However, the Superintendent of Taxes had not issued the required declaration forms for tax-free purchase of raw materials, causing hindrance to the petitioner's operations.

3. Despite being entitled to exemption under the Industrial Policy, the assessing officer issued a notice for sales tax assessment on the petitioner's finished products. The petitioner argued that without determining the exemption status first, their assessment would be prejudiced.

4. The department contended that the assessing officer had the authority to assess a dealer for sales tax liability under the Assam General Sales Tax Act. However, the court emphasized that the assessment was linked to the petitioner's exemption status under the Industrial Policy. The assessing officer was directed to decide on the exemption and proceed with the assessment accordingly. The petitioner was granted the right to challenge any adverse decisions following the assessment.

In conclusion, the writ petition was disposed of with instructions for the assessing officer to determine the petitioner's exemption status under the Assam Industrial Policy, 1991, before proceeding with the assessment. The petitioner was granted the opportunity to seek recourse if aggrieved by the assessment outcome.