2002 (2) TMI 1284 - HC - VAT and Sales Tax

Summary

Issues:
1. Calculation of tax due based on turnover.
2. Application of Section 55 of the Tamil Nadu General Sales Tax Act for rectification.
3. Interpretation of the applicability of Section 55 in cases where the order is appealable.
4. Assessment of penalty based on tax calculation errors.

Issue 1: Calculation of tax due based on turnover
The Assessing Authority calculated the tax due at Rs.2,43,750/- based on the turnover of Rs.1,76,631/-. The petitioner argued that the tax due should have been Rs.24,375/- at 13.8% on the accepted turnover. The court agreed that there was an obvious mistake in the tax calculation, leading to an incorrect penalty calculation of Rs.3,50,439/-.

Issue 2: Application of Section 55 for rectification
The petitioner filed an application under Section 55 of the Tamil Nadu General Sales Tax Act, stating an error in the tax calculation. Section 55 allows rectification of errors apparent on the face of the record within five years. The Assessing Authority rejected the application, leading to the present writ petition challenging the decision.

Issue 3: Interpretation of Section 55 in appealable cases
The respondent argued that since the order was appealable, Section 55 could not be invoked. Citing a previous decision, the respondent contended that Section 55 is only for rectifying clerical errors, not substantive matters. The court disagreed, stating that Section 55 can be used for inadvertent mistakes in tax calculations, distinct from the merits of the case subject to appeal.

Issue 4: Assessment of penalty based on tax calculation errors
The court found the Assessing Authority's order unsustainable due to the tax calculation error. The petitioner agreed to pay the balance tax of Rs.14,251/- after admitting the payment of Rs.10,124/-. The penalty was to be recalculated based on the corrected tax amount, following the provisions of the TNGST Act and the Central Sales Tax Act.

In conclusion, the court allowed the writ petition, modifying the order to correct the tax calculation error and directing the recalibration of the penalty. The judgment clarified the application of Section 55 for rectification of inadvertent mistakes in tax assessments, separate from matters subject to appeal.