2010 (9) TMI 1196 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Validity of the rectified assessments dated 6/3/2009 u/s 37(1) of the Assam General Sales Tax Act, 1993 read with section 109 of the Assam Value Added Tax Act, 2003.
2. Clarification provided by the Commissioner of Taxes, Assam, regarding the notification dated 3/1/2003 issued u/s 9(3) of the Act 1993.
3. Dismissal of the revision petition by the Commissioner of Taxes, Assam, against the rectified assessment.
4. Consequential demands and Bakijai proceedings.

Summary:

1. Validity of the Rectified Assessments:
The petitioner, a Private Limited Company engaged in the manufacture, sale, and supply of P.V.C. Pipes and Plastic Water Tanks, challenged the rectified assessments dated 6/3/2009 u/s 37(1) of the Assam General Sales Tax Act, 1993 read with section 109 of the Assam Value Added Tax Act, 2003. The assessments were based on the interpretation that the notification dated 3/1/2003 was effective from 1/5/2001, thus invalidating the concessional tax rate of 4.4% applied by the petitioner for the assessment year 2004-2005. The rectified assessments demanded an additional tax amount of Rs. 6,64,84,414/-.

2. Clarification by the Commissioner of Taxes:
The Commissioner of Taxes, Assam, clarified that the notification dated 3/1/2003 was intended to be effective from 1/5/2001, which was contested by the petitioner. The petitioner argued that the notification should be valid for three years from the date of its issue, i.e., 3/1/2003, and not retrospectively from 1/5/2001. The court examined the statutory provisions and concluded that the notification's language and the legislative intent indicated that the exemption/reduction in tax rate was meant to be effective from 1/5/2001.

3. Dismissal of the Revision Petition:
The petitioner's revision petition against the rectified assessment was dismissed by the Commissioner of Taxes, Assam, on 24/9/2009. The court upheld this dismissal, noting that the petitioner had availed the benefit of the concessional tax rate for the period from 1/5/2001 to 28/2/2003, and thus, the notification's retrospective application did not prejudice any vested rights.

4. Consequential Demands and Bakijai Proceedings:
Following the rectified assessment, a demand notice for Rs. 64,84,414/- was issued, and Bakijai proceedings were initiated. The court found that the petitioner's interpretation of the notification would result in anomalies and complications for past transactions. The court dismissed the petition, affirming the validity of the rectified assessments, the clarification by the Commissioner of Taxes, and the consequential demands.

Conclusion:
The court dismissed the petition, holding that the notification dated 3/1/2003 was validly interpreted to be effective from 1/5/2001, and the rectified assessments and consequential demands were lawful. The petition lacked merit and was dismissed with no costs.