2013 (5) TMI 781 - HC - VAT and Sales Tax

Levy of the additional surcharge - Notice for levy not issued - Rate of tax - Held that - Both the Tax Board as also the Deputy Commissioner (Appeals) are justified in coming to the correct conclusion. The assessee had deposited the due tax in accordance with notification dated March 7 1994 bearing No. 929 F.4(8)FD/Gr.-4/94-71 wherein in the case of asseessee and similarly situated dealers tax rate of four per cent was prescribed. It is also stated in the said notification that even there is no requirement of filing of form C when the sale is outside the State of Rajasthan. Both the appellate authorities came to the correct conclusion that under section 8(5) of the Central Sales Tax Act and sections 4 and 5 of the Rajasthan Sales Tax Act the tax rate is only four per cent and no additional surcharge is leviable. There was no occasion of levying additional tax as it could not have exceeded the rate prescribed at the rate of four per cent under section 8(1) of the Act. It is also clear on perusal of the assessment order that no case was made out by the assessing officer that the case of the assessee-respondent falls within the provisions of section 8(3) of the Central Sales Tax Act. - Tax Board as well as the Deputy Commissioner (Appeals) came to the correct conclusion. No illegality impropriety or perversity has been noticed in the orders of the two appellate authorities. There is a concurrent finding of fact and no question of law arises particularly in view of the judgments of the honourable apex court 1991 (10) TMI 271 - SUPREME COURT OF INDIA . - Decided against Revenue.

Summary

Issues:
Levy of surcharge on sales tax amount, Compliance with principles of natural justice, Interpretation of relevant notifications, Applicability of additional surcharge, Judicial precedents on similar issues.

Levy of Surcharge on Sales Tax Amount:
The revision petition challenged the levy of surcharge on the sales tax amount deposited by the respondent, a manufacturer of cereal running a flour mill, during the assessment year 1999-2000. The assessing officer had levied surcharge on the tax amount deposited by the respondent, which was contested on the grounds of lack of proper show cause notice and violation of principles of natural justice. The Deputy Commissioner (Appeals) and the Tax Board both found in favor of the respondent, directing the deletion of the surcharge. The High Court upheld this decision, emphasizing that the tax rate prescribed under the relevant notification was only four percent and no additional surcharge was justifiable.

Compliance with Principles of Natural Justice:
The respondent argued that the levy of surcharge was done in violation of principles of natural justice, as there was no proper show cause notice provided by the assessing officer. The Deputy Commissioner (Appeals) and the Tax Board found merit in this argument, leading to the deletion of the surcharge. The High Court concurred with this view, highlighting the importance of adherence to principles of natural justice in tax assessments.

Interpretation of Relevant Notifications:
The case involved the interpretation of notifications issued by the Government of Rajasthan, particularly one dated March 7, 1994, which prescribed a tax rate of four percent for the respondent and similarly situated dealers. The High Court analyzed the provisions of the notifications and determined that no additional surcharge could be levied as per the relevant sections of the Central Sales Tax Act and the Rajasthan Sales Tax Act.

Applicability of Additional Surcharge:
The assessing officer contended that the levy of surcharge was justified and in accordance with the law. However, both the Deputy Commissioner (Appeals) and the Tax Board disagreed, leading to the deletion of the surcharge. The High Court, after reviewing the arguments and relevant provisions, upheld the decisions of the lower appellate authorities, emphasizing that no additional surcharge was warranted based on the applicable laws and notifications.

Judicial Precedents on Similar Issues:
The High Court referred to various judicial precedents, including judgments by the Supreme Court and other High Courts, to support its decision. Citing cases such as Assistant Commissioner (Assessment), Sales Tax Special Circle, Trichur v. Janatha Expeller Co. and Sree Ayyanar Spinning and Weaving Mills Limited v. State of Tamil Nadu, the High Court established that the levy of additional tax or surcharge was not justified in cases where the tax rate was already prescribed at a specific percentage under the relevant tax laws and notifications. The court concluded that the decisions of the Tax Board and the Deputy Commissioner (Appeals) were correct, and the revision petition was dismissed.