2014 (7) TMI 928 - HC - VAT and Sales Tax

Permits required of consignment of goods under the provisions of the TVAT Act - Time extension for producing permits - assessing officer did not grant such time and levied tax and penalty at 150 % - assessee did not challenge the assessment, but filed petitions for rectification of the orders in terms of section 74 of the TVAT Act - Held that - Power of rectification is limited and is akin to a power of review. Any judicial or quasi-judicial authority can exercise powers of review when there is an error apparent on the face of the record. These are the words used in section 74 of the TVAT Act also. Normally as contended by the revenue authority, this court would not in rectification proceedings permit a party to lead fresh evidence nor would it permit a party to place material on record. This however, is subject to the caveat that the party, i.e., the assessee should have been originally given a reasonable opportunity of putting forth its case. If any party, despite being given a responsible opportunity of producing evidence and putting forth its case fails to lead evidence then in rectification proceedings it cannot be permitted to fill up the lacuna in the evidence. However, the present case stands on a different footing. Undoubtedly, in regard to one notice 6064 permits were required to be produced and with regard to the second notice 909 permits were required to be produced. The case of the assessee was that a fire had taken place in the office of the transport company and the record had been destroyed and it may be given time to produce the permits after collecting the same either from the dealers or even from the Department itself. Rectification orders deserve to be set aside. We further direct the Superintendent of Taxes, Vigilance Cell, Agartala, to re-consider the case of the assessee and he shall take into consideration all the copies of the permits which have been produced by the assessee and verify the same. If on verification, the permits are found to be correct no tax or penalty shall be levied in regard to those permits - matter remanded back - Decided in favour of assessee.

Summary

Issues:
Challenge to order rejecting petitions under section 74 of the TVAT Act; Rectification petitions dismissed under section 74; Interpretation of section 74 of the TVAT Act.

Analysis:
The judgment delivered by the High Court of Tripura involved a challenge to an order rejecting petitions under section 74 of the Tripura Value Added Tax Act, 2004. The petitioner, running a transport company, was asked to produce permits for consignments under the TVAT Act. The assessing officer levied a substantial tax and penalty due to the inability of the petitioner to produce all permits within a short period. The petitioner filed rectification petitions under section 74 after collecting a significant number of permits, seeking reassessment. The assessing authority rejected the rectification petitions as time-barred, leading to the petitioner approaching the court. The court initially held that the rectification petitions were within time under section 74, directing the authority to decide them lawfully. However, the rectification petitions were ultimately dismissed on the ground that the petitioner could not reopen the case under section 74.

The court delved into the interpretation of section 74 of the TVAT Act, emphasizing that the power of rectification is akin to a power of review, limited to correcting errors apparent on the face of the record. The court noted that rectification proceedings typically do not allow parties to introduce fresh evidence unless the party was originally given a reasonable opportunity to present its case. In this case, the petitioner faced challenges in producing permits due to a fire destroying records, leading to a request for an extension of time. The court highlighted that the permits were issued by the Sales Tax Department, making it feasible for the petitioner to trace them with assistance. The court criticized the assessing officer for not granting a reasonable opportunity to collect the required permits, deeming the original assessment flawed.

Considering the circumstances, the court set aside the rectification orders and directed the assessing authority to re-evaluate the case, taking into account all permits produced by the petitioner. The authority was instructed to verify the permits and refrain from levying tax or penalty if the permits were found to be correct. The court mandated completion of this process within three months and scheduled a follow-up appearance by the petitioner before the assessing officer. The writ petition was disposed of accordingly, with no costs imposed.