2010 (9) TMI 969 - HC - VAT and Sales Tax

Whether the Sales Tax Appellate Tribunal was justified in holding that the Sales Tax Officer rightly declined to rectify the assessments completed for the assessment years 1999-2000 and 2000-01 based on claim of exemption made subsequent to assessments by the petitioner? Held that - There is no mistake in the assessment. On the other hand assessment of the entire purchase turnover of rubber is strictly in accordance with the changing section and entry in the Schedule. The claim of exemption under the notification if at all tenable should have been claimed in returns and proved with evidence. In the absence of any such claim or evidence on record to prove it the assessments completed based on returns filed and reply filed against assessment notice does not become a mistaken assessment justifying rectification. We therefore dismiss the revision petitions

Summary

Issues:
- Whether the Sales Tax Appellate Tribunal was justified in holding that the Sales Tax Officer rightly declined to rectify the assessments based on a claim of exemption made subsequent to assessments by the petitioner.

Analysis:
The case involved a tyre manufacturer engaged in purchasing rubber during the assessment years 1999-2000 and 2000-01. The manufacturer was paying tax on these purchases without claiming exemption, despite a government notification granting exemption under certain conditions. The assessments were completed based on the returns filed by the petitioner without any exemption claim. Subsequently, the petitioner filed a rectification application claiming exemption nearly a year after the assessments were completed. The assessing officer rejected the claim, leading to appeals and revisions. The core issue was whether a claim of exemption not raised before the assessing officer before the completion of assessment could be corrected under section 43 of the Kerala General Sales Tax Act.

The court emphasized that rectification under section 43 can only correct errors apparent on the face of the record. The petitioner's belated claim for exemption, not part of the record during assessments, could not be entertained in rectification proceedings. The court highlighted that the assessing officer becomes functus officio after completing assessments and can only modify assessments within the powers conferred by the statute. The petitioner's failure to substantiate the exemption claim with required documents and certificates further weakened their case for rectification.

In considering legal precedents, the court rejected the petitioner's reliance on decisions supporting exemption claims in rectification proceedings. The court distinguished cases where the commodity assessed was not taxable under the Act, allowing for rectification, from the present case where the commodity was taxable, and exemption required proof of specific conditions. The court concluded that since no exemption claim was made in the returns or supported by evidence, the assessments based on filed returns were not mistaken, thus dismissing the revision petitions.

In summary, the court upheld the Sales Tax Appellate Tribunal's decision, ruling that the Sales Tax Officer was justified in declining to rectify the assessments based on the belated claim of exemption made by the petitioner after the assessments were completed. The court emphasized the importance of timely and substantiated claims in tax assessments and rectification proceedings, ultimately dismissing the revision petitions.