2012 (11) TMI 1061 - HC - VAT and Sales Tax

Wet dates - exemption from tax - whether wet dates (khajoor) is required to be treated as a fresh fruit? - Held that - clarification issued by the Commissioner was not really called for inasmuch as it would pre-empt the assessing authority as well as the appellate authority from taking a fair and an independent decision in the matter. The manner in which the clarification was issued virtually amounts to guiding the assessing authority to pass the assessment orders in a particular manner after the matters were remanded back by the appellate authority for fresh assessment by the assessing authority. Considering the above and in view of the fact that statutory alternative remedy is available, the petitioner is relegated to the remedy of filing appeal before the appellate authority against the order of assessment.

Summary

Issues:
1. Interpretation of whether wet dates are to be treated as fresh fruit or processed fruit for tax purposes.

Analysis:
The judgment by the High Court of Gauhati involved multiple writ petitions concerning the classification of wet dates (khajoor) for tax assessment under the Assam General Sales Tax Act, 1993. The petitioner, a partnership firm engaged in the purchase and sale of wet dates, claimed that wet dates should be considered fresh fruit and hence exempt from tax, citing past acceptance of this classification by the Department and a clarificatory note from the Ministry of Food Processing. However, the assessing authority treated wet dates as a taxable item, leading to appeals and subsequent remands for fresh assessments. The Commissioner of Taxes, Assam, issued a clarificatory letter declaring wet dates as processed fruit based on legal precedent, which formed the basis for a subsequent assessment order taxing wet dates as preserved fruit for the year 2005-06.

The main contention raised by the petitioner was against the legality and correctness of the assessment order and the clarificatory note issued by the Commissioner. The petitioner argued that the Commissioner's clarification interfered with the quasi-judicial powers of the assessing officer and the appellate authority, going against the established market perception and Central Government's support of wet dates as fresh fruit. The petitioner sought intervention by the court to rectify what was deemed as an erroneous decision by the revenue authorities.

In its judgment, the High Court acknowledged the need for a fact-finding exercise to determine the classification of wet dates as fresh or processed fruit for tax purposes. While recognizing the availability of a statutory appeal, the court expressed disapproval of the Commissioner's clarification, stating that it hindered the independent decision-making process of the assessing and appellate authorities. The court emphasized that administrative interference in quasi-judicial proceedings related to tax assessments was not justified. Consequently, the court directed the petitioner to pursue the statutory remedy of filing an appeal before the appellate authority within a specified timeframe, ensuring that the decision-making process remains uninfluenced by the Commissioner's clarification.

In conclusion, the High Court disposed of all writ petitions on similar terms, emphasizing the importance of allowing the statutory appeal process to proceed without external administrative influence. The judgment highlighted the significance of maintaining the integrity of quasi-judicial proceedings in tax assessments and upheld the principle of fair and independent decision-making in such matters.