1999 (10) TMI 708 - HC - VAT and Sales Tax

Summary

Issues:
1. Challenge against assessment proceedings under the Kerala General Sales Tax Act, 1963.
2. Dispute regarding the applicability of Government orders on tax rates for rubber products.
3. Validity of notice issued under section 19 of the KGST Act.
4. Interpretation of S.R.O. No. 1516 of 1990 and its retrospective effect.
5. Authority of the assessing authority to reopen assessment post appeal.

Analysis:
1. The petitioner, an assessee under the KGST Act, challenged the assessment proceedings through an original petition seeking to quash a notice issued by the second respondent. The main contention was the entitlement to lower tax rates for rubber products under specific Government orders, which was rejected in the assessment order taxed at 8 percent. The Appellate Assistant Commissioner set aside the assessment for 1988-89, directing fresh disposal according to law. Subsequently, a revised assessment was issued taxing hawai straps and chappals at 3 percent from September 1988 to March 1989.

2. The Assistant Commissioner issued a notice under section 19 of the KGST Act, contesting the applicability of the reduced tax rate based on S.R.O. No. 1516 of 1990. The petitioner argued that the concessional rate was granted post-appeal, and S.R.O. No. 1516 could not be applied retrospectively. The Special Government Pleader contended that the notice was valid and objections could be filed against it.

3. The Court considered the jurisdiction of the assessing authority under section 19(3) to reopen assessments post-appeal or revision. The petitioner's right to challenge the notice was upheld, given the prolonged pendency of the original petition. The Court referenced a Division Bench judgment regarding the nature of S.R.O. No. 1516 of 1990, emphasizing its lack of retrospective effect.

4. The Court further analyzed the authority of the assessing authority to reopen assessments after appellate directions. Citing precedents, the Court held that once an appellate order determines a matter, the assessing authority cannot disregard it by invoking section 19. The dispute on the concessional rate was deemed settled by the appellate order, rendering the notice under section 19 invalid.

5. Consequently, the Court quashed the notice issued under section 19, affirming the petitioner's entitlement to the concessional rate as per the appellate authority's decision. The original petition was allowed, dismissing the related order, thereby upholding the petitioner's challenge against the assessment proceedings and the subsequent notice.