1999 (12) TMI 840 - AT - VAT and Sales Tax

Summary

Issues:
1. Rectification under section 55 of the Tamil Nadu General Sales Tax Act, 1959.
2. Applicability of subsequent decisions on rectification.
3. Taxability of declared goods at a single point.
4. Interpretation of the second proviso to section 3(2) of the Act.

Issue 1: Rectification under section 55 of the Act
The petitioner sought to quash proceedings and direct the Sales Tax Appellate Tribunal to admit a petition under section 55 of the Act to grant relief. The assessing authority allowed exemption on second sales of voltage stabilizers, but later disallowed it, leading to appeals. The Appellate Tribunal dismissed the petition for rectification under section 55, stating that a subsequent decision cannot be a ground for invoking this section. The petitioner argued that the Tribunal should rectify an error apparent on the face of the record within five years of the order, citing legal precedents. The Tribunal was urged to consider the Supreme Court's decision in Shanmuga Traders v. State of Tamil Nadu.

Issue 2: Applicability of subsequent decisions on rectification
The petitioner contended that the Appellate Tribunal erred in dismissing the rectification petition, emphasizing that a subsequent decision by the Supreme Court or High Court could rectify an order. The petitioner relied on legal principles stating that an order found to be erroneous by applying a subsequent decision could be rectified. However, the Government Advocate argued that the Tribunal's order rejecting the rectification petition was justified and that no revision lay against it. The Tribunal considered these contentions and reviewed the records.

Issue 3: Taxability of declared goods at a single point
The Tribunal analyzed the Supreme Court's decision in Shanmuga Traders v. State of Tamil Nadu concerning declared goods taxable at a single point. It clarified that the decision in Vasu General Traders did not deal with declared goods and was not overruled by the Supreme Court. The Tribunal highlighted the relevance of the second proviso to section 3(2) of the Act, emphasizing that for goods in the First Schedule taxable at the first sale point, tax liability falls on the earliest dealer liable under the Act. The Tribunal concluded that the earlier sale in this case was not taxable, supporting the Appellate Tribunal's decision to reject the claim of second sale exemption.

Issue 4: Interpretation of the second proviso to section 3(2) of the Act
The Tribunal examined the second proviso to section 3(2) introduced by an amended Act in 1996, emphasizing its impact on taxable sales of goods in the First Schedule. It noted that the earlier sale was not taxable, leading to the rejection of the rectification application by the Appellate Tribunal. The Tribunal found no grounds for faulting the Appellate Tribunal's decision and dismissed the original petition accordingly.

In conclusion, the Tribunal upheld the Appellate Tribunal's decision, emphasizing the legal principles and specific provisions governing the taxability of goods under the Act. The dismissal of the rectification petition was deemed appropriate based on the facts and legal interpretations presented during the proceedings.