2006 (11) TMI 614 - HC - VAT and Sales Tax

Summary

Issues:
1. Assessment of taxable turnover for the year 2003-04.
2. Compliance with rule 52 of the Tamil Nadu General Sales Tax Rules, 1959 regarding pre-assessment notice.

Analysis:

1. Assessment of Taxable Turnover:
The petitioner, a dealer in computer spares and UPS, filed returns for the assessment year 2003-04, reporting a total turnover of Rs. 1,65,61,083 and a taxable turnover of Rs. 26,04,154. The petitioner claimed exemption on a turnover of Rs. 1,39,56,929, attributing the taxable turnover to resale turnover at one percent. However, the respondent determined the taxable turnover to be Rs. 1,69,15,233, disallowing the claimed exemption due to lack of details on the purchase of relevant goods and reasons for exemption. The petitioner contended that a pre-assessment notice was required before framing the assessment, which was not issued in this case. The court directed the production of the assessment file to verify if the pre-assessment notice was served as per rule 52 of the Rules.

2. Compliance with Rule 52 - Pre-Assessment Notice:
Rule 52 of the Tamil Nadu General Sales Tax Rules, 1959 outlines the modes of serving notices to dealers, including giving it to the dealer, manager, agent, or sending it by registered post if the address is known. The petitioner argued that no pre-assessment notice was served, making the assessment arbitrary and illegal. However, the court found evidence in the assessment file, indicating the service of the pre-assessment notice on June 3, 2006, and the assessment order on August 19, 2006. The court noted that the seal of the petitioner's company was affixed, signifying authorized receipt. The judge concluded that the notice was duly served as per the rule, dismissing the writ petition and ruling that the petitioner must pay 25 percent of the tax component within fifteen days to file an appeal, failing which the indulgence granted would be revoked automatically.

In conclusion, the judgment addressed the issues of assessing taxable turnover and compliance with the pre-assessment notice requirement under rule 52 of the Rules. The court found in favor of the respondent, determining that the notice was properly served, leading to the dismissal of the writ petition and imposing conditions for filing an appeal.