2013 (12) TMI 1446 - HC - VAT and Sales Tax

What is the procedure to be followed for recovery of dues payable under the Tripura Sales Tax Act, 1976 after the repeal thereof and the enforcement of the Tripura Value Added Tax Act, 2004 especially in a case where the proceedings for assessment are started after the TVAT Act came into force - Held that - A bare perusal of sub-section (1) of section 89 shows that the Tripura Sales Tax Act, 1976 and Tripura Additional Sales Tax Act, 1990 have been repealed with effect from April 27, 2005, the date of commencement of the TVAT Act. The proviso to the section, however, clearly lays down that despite the repeal of the aforesaid Acts, any right, title, obligations or liabilities acquired, accrued or incurred under the previous Acts shall continue to be valid notwithstanding the repeal of the Act. - Sub-section (3) of section 89 of the Act also makes it clear that all arrears of tax, interest, penalty, fee or other amount due as on April 27, 2005 whether assessed or levied before the said date may be recovered, as if such tax, penalty, interest, fee or other amount is levied under the new Act. The appellate and revisional authorities shall also be as per the TVAT Act. Therefore, the intention of the Legislature is absolutely clear that though the recovery may be made as per the terms of the repealed Acts, the procedure for recovery and adjudication has to be that provided under the TVAT Act. Therefore, it is only the officers under the TVAT Act who had the jurisdiction to exercise the powers under section 89(2)(b) of the Act and the order passed against the assessee is, therefore, without jurisdiction and it is accordingly set aside. - Decided in favour of assessee.

Summary

Issues:
Recovery of dues under the Tripura Sales Tax Act, 1976 after its repeal and the enforcement of the Tripura Value Added Tax Act, 2004.

Analysis:
The judgment by the Tripura High Court addressed the procedure for recovering dues under the Tripura Sales Tax Act, 1976 post its repeal and the implementation of the Tripura Value Added Tax Act, 2004 (TVAT Act). The case involved a dispute regarding assessment years 2002-2003, 2003-2004, and 2004-2005, with a reassessment notice issued in May 2005.

The TVAT Act, effective from April 27, 2005, repealed the Tripura Sales Tax Act, 1976, and the Tripura Additional Sales Tax Act, 1990. Section 89 of the TVAT Act dealt with the repeal and savings provisions. Notably, sub-section (1) emphasized that despite the repeal, rights, obligations, or liabilities acquired under the previous Acts would remain valid.

Sub-section (2) of section 89 clarified that ongoing actions or proceedings under the old Acts would continue under their provisions. The judgment highlighted a crucial distinction in cases where obligations arose under the repealed Acts, but enforcement actions began post the TVAT Act's enactment. In such instances, clause (b) of sub-section (2) required assessment under the TVAT Act provisions.

The court interpreted that although the liability must be assessed under the old Act, the assessment procedure should align with the TVAT Act. Sub-section (3) reinforced that arrears as of April 27, 2005, could be recovered as if under the new Act, indicating that recovery and adjudication procedures should follow the TVAT Act.

In the specific case, as notices were issued post the TVAT Act's enforcement, only officers under the TVAT Act had jurisdiction under section 89(2)(b). Consequently, the court deemed the order against the assessee as lacking jurisdiction and set it aside. The State was directed to initiate fresh assessment proceedings in compliance with the law, with the assessee retaining the right to raise objections, including limitation concerns.

Ultimately, the writ petition was allowed without costs, emphasizing the necessity for adherence to the TVAT Act's recovery and adjudication procedures post the repeal of the previous Acts.