2016 (9) TMI 1261 - HC - VAT and Sales Tax

Disallowance of option for payment of tax at compounded rate - levy of tax at appropriate rate u/s 5 of the TNVAT Act - construction of Reinforced Earth Walls for the approach roads leading to bridges and flyovers - Held that - The power given to the Assessing Officer under section 84 of the TNVAT Act, is a power to be exercised in accordance with law and merely stating that there is no mistake apparent on the face of the record, would not be sufficient, especially when the petitioner points out that there are difference in the figures leading to a wrong calculation of the Taxable Turnover. Therefore, the least that the second respondent is expected to do is to examine as to whether the factual discrepancy pointed by the petitioner is correct, if in the opinion of the second respondent, the same is incorrect, then he should record reasons as to why he has come to a conclusion that it is incorrect. Those basic requirements are absent in the orders passed by the second respondent. Levy of interest - Held that - It is no doubt true that the petitioner was not represented by his Counsel. If that be so, then the Revision Petitions should be dismissed for default, but the authority chose to give brief reasons for rejection. The reasons do not deal with the factual position nor deal with the contentions raised by the petitioner - the orders rejecting the Revision Petitions with regard to levy of interest is held to be a non-speaking order. Since the matter has been prolonging for a long period of time and the balance amount of interest payable is ₹ 27,14,101/-, this Court is inclined to impose some conditions on the petitioner to be entitled to one more opportunity to go before the Revisional Authority. Petition allowed - decided in favor of petitioner.

Summary

Issues:
Challenge to orders rejecting Revision Petitions under TNVAT Act and CST Act; challenge to orders demanding interest under TNVAT Act; rejection of Rectification Petitions under TNVAT Act; rejection of Revision Petitions by the Revisional Authority; imposition of penalty proposed by the Assessing Officer.

Analysis:
The petitioner, a registered dealer under TNVAT Act and CST Act, filed Writ Petitions challenging orders rejecting Revision Petitions by the Revisional Authority. The petitioner executed projects for construction and filed monthly returns for assessment years 2006-2011, paying tax at 2%. Subsequently, inspections revealed ineligibility for compounded tax rate, leading to proposed disallowance and levy of tax at the appropriate rate under TNVAT Act. The petitioner contested these actions, citing discrepancies in sales figures and challenging the levy of interest under section 42 of TNVAT Act.

The petitioner filed Rectification Petitions under TNVAT Act, which were rejected by the second respondent. The rejection lacked sufficient reasoning, failing to address factual discrepancies pointed out by the petitioner. The petitioner then filed Revision Petitions against these orders, raising multiple grounds, including delay in filing Rectification Petitions. The Revisional Authority rejected the Revision Petitions based solely on the timing of the Rectification Petitions, without valid reasons or findings of dilatory tactics.

Regarding the levy of interest, previous Writ Petitions directed the Revision Petitions to be entertained and disposed of on merits. However, the Revisional Authority rejected the Revision Petitions without addressing the petitioner's contentions or the Supreme Court decision cited. The Court deemed these rejections as non-speaking orders, lacking factual consideration.

The Court decided to interfere with the impugned orders and remand the matter to the first respondent for fresh consideration. The petitioner was given the opportunity to pay a specified amount towards disputed interest within a set period. Compliance with this condition entitled the petitioner to appear before the first respondent again, present submissions, and receive a decision in accordance with the law. Failure to comply empowered the first respondent to reject the Revision Petitions. The demand for the remaining interest amount was stayed pending the disposal of the Revision Petitions.