2007 (5) TMI 586 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Whether the appeal against the provisional assessment becomes infructuous after the final assessment order under section 29 of the Rajasthan Sales Tax Act, 1994.
2. The legal distinction between provisional and final assessments under the Rajasthan Sales Tax Act, 1994.
3. The applicability of previous judgments regarding the effect of final assessments on provisional assessments.

Analysis:

1. Whether the appeal against the provisional assessment becomes infructuous after the final assessment order under section 29 of the Rajasthan Sales Tax Act, 1994:

The court examined whether the Tax Board was correct in dismissing the Revenue's appeal as infructuous following the final assessment order. The Tax Board had relied on the Division Bench judgment in *Commercial Taxes Officer, Anti-Evasion v. Rajasthan Taxation Tribunal [2001] 124 STC 298; 25 Tax World 81*, which held that the provisional assessment merges into the final assessment, rendering any appeal against the provisional order moot. The court upheld this view, noting that the provisional assessment is subject to adjustment in the final assessment, as per section 25(5) of the Act of 1994.

2. The legal distinction between provisional and final assessments under the Rajasthan Sales Tax Act, 1994:

The court emphasized that provisional assessments under sections 27 and 28 are independent proceedings but are subject to final adjustments in the regular assessment under section 29. The learned counsel for the Revenue argued that the provisional assessment order should stand independently and be appealable. However, the court reiterated that provisional assessments are inherently temporary and subject to the final determination of tax liability under section 29. The court referenced section 34, which states that a provisional assessment becomes final only if no regular assessment is made within the specified time.

3. The applicability of previous judgments regarding the effect of final assessments on provisional assessments:

The court reviewed previous judgments, particularly the Division Bench ruling in *Commercial Taxes Officer, Anti-Evasion v. Rajasthan Taxation Tribunal [2001] 124 STC 298; 25 Tax World 81*, which overruled the earlier decision in *Chauhan Enterprises [1994] 93 STC 37*. The court affirmed that the legal position is that provisional assessments are subsumed by final assessments. The court also noted that in *Shreechand v. Commercial Taxes Officer [1996] 100 STC 53*, it was held that provisional assessments are subject to final assessments, and any orders in provisional assessment appeals are also subject to the final assessment.

Conclusion:

The court concluded that the Tax Board correctly dismissed the Revenue's appeal as infructuous following the final assessment order. The provisional assessment is inherently provisional and subject to final adjustments, and the final assessment determines the ultimate tax liability. The court dismissed the revision petition, affirming the Tax Board's decision.