2011 (8) TMI 1035 - HC - VAT and Sales Tax

Rate of assessment of tax - Import of machinery - assessment of tax at 12 per cent instead of 20 per cent under entry 9 of the Eleventh Schedule to the Act - Held that - The impugned order cannot be sustained. Firstly for the reason, that it is totally a non-speaking order and does not deal with the contention raised by the petitioner, to challenge the assessment order to be violative of the statutory provisions of the Tamil Nadu General Sales Tax Act, 1959 - The law is well-settled, that the quasi-judicial authority is required to pass orders meeting with all the contentions raised, so that, the higher authorities can see the legality of reasons for coming to the conclusion - impugned order is a non-speaking order, which cannot be sustained in law - matter remanded back - Decided in favour of assessee.

Summary

Issues:
Challenge to assessment order under Tamil Nadu General Sales Tax Act, 1959.

Analysis:
The petitioner, a dealer in textile and ready-made garments, filed a return which was not accepted due to the incorrect assessment of sales tax turnover related to imported machinery. The assessment was revised twice, first treating the machinery as imported textile machinery and then subjecting it to 20% tax under the Eleventh Schedule. The petitioner contended that the machinery should be treated as textile machinery under item 63B of the First Schedule, thus assessable at 4%. The application challenging the assessment under section 16D of the Act was rejected by the Special Committee, citing that the case did not fall under its purview. The court found the rejection order to be non-speaking and not addressing the petitioner's contentions, which is essential for a quasi-judicial authority. Therefore, the court allowed the writ petition, set aside the impugned order, and remitted the case back to the Special Committee to pass fresh orders considering the petitioner's contentions and providing reasons for their decision.

This judgment highlights the importance of quasi-judicial authorities addressing all contentions raised by parties and providing reasoned decisions. The court emphasized that non-speaking orders are unsustainable in law and directed the Special Committee to reconsider the petitioner's challenge to the assessment order under the Tamil Nadu General Sales Tax Act, 1959. The petitioner was instructed to appear before the Committee for further proceedings. The court's decision to set aside the initial order and allow the petitioner's challenge underscores the significance of due process and proper reasoning in administrative decisions under tax laws.