2008 (11) TMI 652 - HC - VAT and Sales Tax

Whether the Sales Tax Appellate Tribunal was justified in their finding that the assessee failed to prove the conditions for claiming return of tax paid in respect of articles returned by the purchaser? Held that - Section 4C provides the procedure for refund of tax of sales return and as per the said provision, the claim for refund of tax should be made before the assessing officer within thirty days of the receipt of despatch of the goods or before the completion of final assessment, whichever is later, in the statutory form as prescribed under form I and admittedly, no such claim was made by the assessee, invoking section 4C of the TNGST Act. In such circumstances, the assessing authority was not obliged to accept the plea of the assessee at a belated point of time. In any case, the assessee was not able to demonstrate the return of goods by the purchaser and the corresponding return of the value of such sale with the sales tax collected to the purchaser. In the face of such factual finding rendered against the petitioner, it is not possible for this court to take a different view in the tax case. Therefore, no merit in the contention of the petitioner and accordingly, the question of law is decided against the assessee and in favour of the Revenue

Summary

Issues:
- Whether the Sales Tax Appellate Tribunal was justified in finding that the assessee failed to prove conditions for claiming return of tax paid for articles returned by the purchaser?

Analysis:
The case involves an appeal by the assessee against an order of the Tamil Nadu Sales Tax Appellate Tribunal, where the appeal was dismissed, confirming the findings of the Appellate Assistant Commissioner. The dispute arose from the assessment year 1995-96, where the assessee reported turnover but failed to include certain sales in the returns, leading to a finding of suppression by the enforcement wing officials. The assessing officer treated the unreported turnover as suppression and imposed penalties. The Appellate Assistant Commissioner upheld the assessment, noting discrepancies in the assessee's claims regarding the return of goods by the purchaser. The Tribunal affirmed the assessment, emphasizing the failure of the assessee to record the sales initially and only doing so after the suppression was detected. The Tribunal also re-determined the penalty amount.

Regarding the penalty issue, the Tribunal found insufficient grounds for levying the penalty at the maximum rate and adjusted it based on the difference between the tax paid as per return and the assessment order. The penalty was recalculated at 75% of the balance amount, resulting in a specific penalty figure. Dissatisfied with the Tribunal's decision, the assessee filed the current tax case challenging the findings.

In the arguments presented, the assessee contended that additional documents proved the return of goods by the purchaser, justifying the exclusion of those sales from the accounts. However, the Special Government Pleader argued that the assessee failed to provide acceptable evidence to support their claims of returned goods. The assessing officer's assessment order highlighted the filing of a revised return later to include the previously omitted turnover, which was also taxed. Despite evidence of the actual sale and payment, the assessee couldn't substantiate the cancellation of the sale and return of goods by the purchaser, as required for a refund claim.

The court examined Section 4C governing the refund procedure for sales return tax claims, emphasizing the need for timely submission of refund claims with supporting documentation. As the assessee failed to meet these requirements and couldn't prove the return of goods and corresponding refund to the purchaser, the court upheld the authorities' factual findings and rejected the assessee's contentions. Consequently, the court ruled against the assessee, upholding the decision in favor of the Revenue, and dismissed the tax case without costs.