2007 (10) TMI 576 - HC - VAT and Sales Tax

Entitlement to file an application under section 5 of the 2002 Act - Held that - The Tamil Nadu Sales Tax (Settlement of Disputes) Act, 2002 came to be enacted for the purpose of expeditious settlement of disputes relating to arrears of tax, penalty or interest pertaining to sales tax by giving substantial relief for the assessee to settle the matter. As stated already, even though the first respondent-assessee has succeeded before the first appellate authority because of the fact that the revision is pending at the instance of the State before the Joint Commissioner, the assessee, in order to avoid further conflict or further dispute, is entitled to file an application under section 5 of the 2002 Act as the first respondent-assessee is fulfilling the requirement under section 4 of the 2002 Act . Hence, the petitioner has not made out any case for interference with the order of the Special Tribunal. The writ petition is dismissed.

Summary

Issues:
1. Correctness of the order passed by the Tamil Nadu Taxation Special Tribunal.
2. Eligibility for settlement under the Tamil Nadu Sales Tax (Settlement of Disputes) Act, 2002.

Issue 1: Correctness of the order passed by the Tamil Nadu Taxation Special Tribunal:

The case involved a dispute regarding the order passed by the petitioner non-suiting the first respondent for making an application under section 5 of the Tamil Nadu Sales Tax (Settlement of Disputes) Act, 2002. The first respondent, a dealer in granite, faced a revised assessment order disallowing the claim of exemption of export sales. The Appellate Assistant Commissioner allowed the appeal, but the Joint Commissioner initiated a suo motu revision. The first respondent opted to settle the dispute under the 2002 Act, but the application was rejected by the petitioner. The Special Tribunal set aside the petitioner's order, directing the petitioner to entertain the application. The petitioner argued that the revision pending was not by the first respondent and that the first respondent was not an aggrieved person as there was no tax liability. However, the court held that the first respondent was entitled to file an application under the 2002 Act as the revision was pending, fulfilling the requirements under section 4 of the Act. The court dismissed the writ petition, upholding the Special Tribunal's order.

Issue 2: Eligibility for settlement under the Tamil Nadu Sales Tax (Settlement of Disputes) Act, 2002:

The eligibility for settlement under the Act was a crucial point of contention. Section 4 of the Act outlined the conditions for filing an application for settlement of arrears of tax, penalty, or interest. The provision required that an appeal or revision must have been filed before a specific date and be pending before the authority at the time of application. The court interpreted that the appeal or revision could be filed by either the assessee or the State, and the pendency of the appeal or revision was the key prerequisite. The court rejected the argument that the first respondent, having succeeded before the first appellate authority, was not entitled to invoke the provisions of the 2002 Act. It emphasized that the Act aimed to provide a mechanism for expeditious settlement of disputes and that the first respondent's application under section 5 was valid as the revision was pending, despite the relief granted by the appellate authority. The court upheld the provisions of the Act and dismissed the petitioner's contentions, affirming the Special Tribunal's order.

In conclusion, the court's judgment upheld the eligibility of the first respondent to file an application under the Tamil Nadu Sales Tax (Settlement of Disputes) Act, 2002, despite the relief granted by the appellate authority and the pending revision initiated by the State. The court emphasized the importance of fulfilling the statutory requirements for settlement and dismissed the writ petition, affirming the Special Tribunal's decision.