2011 (4) TMI 1272 - HC - VAT and Sales Tax

Reassessment under the provisions of the Tamil Nadu General Sales Tax Act treating the entire turnover as local sale Held that - We do not think that this court could grant such a prayer for a second innings to make up for its lapses in the reassessment proceedings to make a de nova enquiry at this distance of time. Considering the fact that at the time of reopening when the Revenue did not have materials at all to disturb the contents of form F and it was not the case of the Revenue that the particulars in form F were found to be untrue, no purpose would be served in remanding the matter back to the assessing officer. Hence, the said prayer of the Revenue stands rejected. In the result, the tax case (revision) stands allowed.

Summary

Issues Involved:
1. Validity of reassessment proceedings under the Tamil Nadu General Sales Tax Act.
2. Applicability of exemption under Section 6A of the Central Sales Tax Act.
3. Evaluation of evidence and materials provided by the assessee.
4. Jurisdiction and legal grounds for reopening the assessment.

Issue-wise Detailed Analysis:

1. Validity of Reassessment Proceedings under the Tamil Nadu General Sales Tax Act:
The reassessment proceedings were initiated on the grounds that the consignee took delivery of the goods at Pollachi and moved them in its own vehicle, indicating local sales assessable under the Tamil Nadu General Sales Tax Act. The assessing officer argued that the goods were noted in form XX delivery note as movement to "our branch," despite the assessee having no branch in Kerala. The first appellate authority and the Tribunal upheld this view, leading to the reassessment treating the entire turnover as local sales.

2. Applicability of Exemption under Section 6A of the Central Sales Tax Act:
The original assessment had granted exemption under Section 6A of the Central Sales Tax Act based on the details in form F, sale pattials, ledger extracts, and other records. The reassessment sought to withdraw this exemption, arguing that the transactions were local sales. However, the court emphasized that once a declaration in form F is accepted and acted upon by the Revenue, it creates a legal fiction that the transaction is otherwise than as a result of sale. This legal fiction must be given full effect unless the particulars furnished are found to be incorrect or untrue.

3. Evaluation of Evidence and Materials Provided by the Assessee:
The assessee provided various documents, including an agreement copy, despatch advice, form 13, form F, sale pattials, sale bill copy, ledger extract, and KGST return copy. The original assessment had verified these details and granted exemption. The reassessment did not disturb the acceptance of form F or provide any new evidence to discredit the details in form F. The court noted that the reassessment order failed to address the relevancy of the details in form F and merely relied on the fact that the consignee had an office in Pollachi and took delivery of the goods.

4. Jurisdiction and Legal Grounds for Reopening the Assessment:
The court referred to the Supreme Court decision in Ashok Leyland Ltd. v. State of Tamil Nadu, which clarified that Section 6A of the Central Sales Tax Act provides conclusive proof unless the details are found to be fraudulent, collusive, or misrepresented. The reassessment based on a mere change of opinion or the discovery of new materials without indicating a jurisdictional error is not sufficient grounds for reopening. The court found that the reassessment rested on insufficient grounds and did not justify revoking the exemption granted under Section 6A.

Conclusion:
The court concluded that the reassessment order revoking the exemption could not be sustained due to the lack of evidence to discredit the details in form F and the improper grounds for reopening the assessment. The court set aside the order of the Tribunal and rejected the Revenue's request for a remand for a de novo enquiry, emphasizing that no purpose would be served in remanding the matter back to the assessing officer at this distance of time. Consequently, the tax case (revision) was allowed, and no costs were awarded.