2006 (9) TMI 523 - HC - VAT and Sales Tax

Summary

Issues:
Challenge to order of assessment by Assessing Authority, liability to pay purchase tax on goods purchased in one state and transferred to another, interest on delayed payment of tax, penal action under section 47 of the Act, interpretation of relevant legal provisions, applicability of previous court judgments, benefit of judgment upheld by Supreme Court, need for specific findings in assessment order, remand for fresh consideration by Assessing Authority, release of bank guarantee.

Analysis:
The petitioner directly challenged the order of assessment made by the Assessing Authority, which found the petitioner liable to pay purchase tax on goods purchased in one state and transferred to another. The petitioner was also held liable for interest on delayed tax payment and faced penal action under section 47 of the Act. The Assessing Authority relied on a previous Sales Tax Tribunal order, which was reversed by the High Court in a similar case involving Nipha Exports Pvt. Ltd. The High Court held that the movement of goods from one office to another for export should be considered in the course of export, contrary to the findings of the Tribunal. This judgment was later upheld by the Supreme Court.

The State contended that the petitioner could only benefit from the court judgment if it was proven that the goods transferred to the head office were actually exported out of the country. Since the assessment order lacked specific findings on this aspect, the petitioner could not directly benefit from the judgment. The court noted the need for a re-examination by the Assessing Authority due to the reversal of the Tribunal's order in a similar case.

Consequently, the court quashed the assessment order and remanded the matter back to the Assessing Authority for a fresh consideration in accordance with the law. The petitioner was directed to appear before the Assessing Authority on a specified date. Additionally, the court directed the Assessing Authority to decide on the release of the bank guarantee within three months from the petitioner's appearance, in line with the assessment order.

In conclusion, the writ petition challenging the assessment order was disposed of by quashing the order and remanding the matter for fresh consideration. The judgment emphasized the importance of specific findings in assessment orders and the need for compliance with legal provisions.