1995 (7) TMI 398 - HC - VAT and Sales Tax

Summary

Issues:
1. Rectification of assessment order based on retrospective amendment of tax rate.
2. Interpretation of Section 55 of the Tamil Nadu General Sales Tax Act, 1959.
3. Applicability of legal principle in case of retrospective amendments.
4. Duty of assessing authority to rectify errors apparent on the face of the record.

Analysis:
1. The petitioner, a dealer in radios, sought rectification of assessment orders for the years 1980-81 and 1981-82 due to a retrospective reduction in the tax rate on radios from 15% to 10%. The State Government issued a notification altering the tax rate with retrospective effect, leading to the petitioner's request for rectification within the prescribed time limit of five years from the date of assessment orders.

2. The petitioner relied on Section 55 of the Act, which empowers authorities to rectify errors apparent on the face of the record. The petitioner argued that the error in adopting the 15% tax rate instead of the revised 10% rate was evident post the retrospective amendment, making rectification necessary.

3. Citing legal precedents, the petitioner's counsel highlighted that retrospective amendments necessitate the application of the amended provisions from the specified date. The legal principle dictates that actions based on erroneous laws prior to retrospective amendments cannot be considered final, justifying rectification of assessment orders in such cases.

4. The assessing authority initially rejected the rectification request for the 1980-81 assessment, stating that the tax rate was valid at the time of assessment. For the 1981-82 assessment, the authority advised seeking remedies through appeal under Section 31 of the Act. However, the petitioner argued that rectification under Section 55 should be granted when errors are apparent, regardless of potential reductions in assessments.

5. The Government Advocate opposed the rectification, suggesting that the petitioner should have appealed the orders instead. The court, however, emphasized the legislative intent behind the retrospective amendment, clarifying that the assessing officer erred by not applying the revised tax rate, leading to the quashing of the impugned orders and directing necessary rectifications in line with the altered law.

6. In conclusion, the court allowed the writ petitions, emphasizing the duty of the assessing authority to rectify errors apparent on the face of the record, especially in cases involving retrospective amendments impacting tax assessments.