2007 (12) TMI 438 - HC - VAT and Sales Tax

Summary

Issues:
Interpretation of the composition scheme for payment of entertainment tax under a specific notification.
Validity of the assessing authority's decision to impose tax liability on the assessee under the composition scheme.
Applicability of the composition scheme after its revocation by the Deputy Commissioner.
Jurisdiction of the Tax Board in remanding the matter to the assessing authority.

Analysis:
The High Court addressed the issue of interpreting the composition scheme for entertainment tax payment under a notification. The Tax Board held that the assessee could not be forced to pay tax under the composition scheme post its cancellation from May 22, 1999. The court emphasized that the choice to continue with the composition scheme lies with the assessee, and the department cannot compel participation. The assessing authority's decision to impose tax liability under the composition scheme was deemed incorrect.

Regarding the applicability of the composition scheme after its revocation by the Deputy Commissioner, the court clarified that the cancellation of the scheme on August 3, 1999, did not impact the period from May 22, 1999, to June 30, 1999. The court emphasized that the Deputy Commissioner's order did not mandate adherence to the composition scheme for the said period.

The court also discussed the jurisdiction of the Tax Board in remanding the matter to the assessing authority. The Tax Board's decision to remand the case for fresh assessment orders based on the returns filed by the assessee was upheld. The court concluded that no legal question arose from the Tax Board's order, leading to the dismissal of the revision petitions.

In summary, the High Court upheld the Tax Board's decision, emphasizing the assessee's right to choose the tax payment system post the composition scheme's revocation. The court dismissed the revision petitions, affirming that the assessing authority erred in imposing tax liability under the composition scheme and that the matter was correctly remanded for fresh assessment based on the returns filed by the assessee.