2001 (1) TMI 955 - AT - VAT and Sales Tax

Summary

Issues Involved:
1. Classification and applicable tax rate on sales of mini transformers and coils for television sets.
2. Legality of the assessment orders passed by the assessing authority.
3. Validity of the penalty levied under section 12(3)(b) of the Tamil Nadu General Sales Tax Act, 1959.
4. Jurisdictional challenge and the applicability of judicial review under Article 226 of the Constitution of India.

Issue-wise Detailed Analysis:

1. Classification and Applicable Tax Rate:
The main contention was regarding the classification of mini transformers and coils for television sets and the applicable tax rate. The petitioners argued that the goods should be taxed at 3% as per the first appellate authority's decision for the year 1993-94. However, the court noted that the notifications reducing the tax rate to 3% were canceled by G.O. Ms. No. 87, dated March 17, 1993. Therefore, for the assessment year 1994-95, the applicable tax rate was 12%, not 3%.

2. Legality of the Assessment Orders:
The assessment orders dated January 31, 1997, classified the sales turnover of mini transformers and coils for television sets at 12%. The court found that the dealers did not file objections to the pre-assessment notices nor did they appeal against the assessment orders. Thus, the assessments became final. The court emphasized that the assessing authority provided sufficient opportunity to the dealers, and there was no violation of natural justice principles.

3. Validity of the Penalty Levied:
The penalty under section 12(3)(b) was levied because the dealers submitted incorrect returns. The court explained that the penalty was calculated based on the difference between the tax assessed and the tax paid as per the return, as stipulated in section 12(3)(b). Since the dealers did not appeal against the penalty, it stood valid. The court reiterated that the penalty was justified because the dealers failed to file accurate returns and did not challenge the assessment orders within the statutory period.

4. Jurisdictional Challenge and Judicial Review:
The petitioners sought to invoke the writ jurisdiction to quash the assessment orders. The court highlighted that judicial review under Article 226 is confined to the decision-making process, not the decision itself. Since there was no illegality or violation of natural justice in the assessment process, the court found no grounds to interfere. The court cited precedents emphasizing that a writ cannot be issued to correct findings of fact or to challenge orders that have become final due to the petitioners' own laches.

Conclusion:
The court dismissed the petitions, holding that the dealers allowed the assessments for 1994-95 to become final by not filing statutory appeals. The court found no merit in the petitioners' contentions and ruled that there was no case to invoke writ jurisdiction to interfere with the assessment orders. The orders of the assessing authority, including the levy of penalty, were upheld as valid and lawful.