2014 (7) TMI 971 - HC - VAT and Sales Tax

Writ of Certiorarified Mandamus - Call for records - Violation of principle of natural justice - Held that - Irrespective of the submissions made by either counsel, without going into the merits of the matter, based on the circulars dated 29.06.1999 and 28.02.2001, issued by the Commissioner of Commercial Taxes, Chennai, petitioner is directed to pay 10% of the tax within four weeks from the date of receipt of a copy of this order. On such payment, the respondent is directed to consider the representation of the petitioner dated 03.05.2014 on re-submission together with the Form-C and Form-H declaration forms and re- open the assessment and receive the declaration forms and pass orders in accordance with law, within a period of four weeks thereafter - Decided against assessee.

Summary

Issues: Assessment under CST Act for non-production of Form-C and Form-H declarations, violation of principles of natural justice, binding effect of administrative circulars, availability of appellate remedy.

Assessment under CST Act: The petitioner, an assessee, reported a total turnover under the Central Sales Tax Act for the assessment year 2011-2012. The respondent issued pre-assessment notices alleging incorrect reporting of export sales turnover and proposed disallowance of exemption claims due to non-filing of Form-H declarations. Despite the petitioner's efforts to collect declaration forms, the respondent issued an assessment order levying tax on the grounds of non-production of required declarations. The petitioner submitted representations and produced the necessary declarations, but the respondent passed the assessment order before considering the submissions.

Violation of Principles of Natural Justice: The petitioner contended that the assessment order was illegal, arbitrary, and violated the principles of natural justice as the respondent failed to consider the representations and supporting documents provided by the petitioner before passing the order. The petitioner sought a writ of Certiorarified Mandamus to quash the assessment order and direct the respondent to re-open the assessment, consider the representations, and pass orders within a specified time frame.

Binding Effect of Administrative Circulars: The petitioner relied on administrative circulars issued by the Commissioner of Commercial Taxes, arguing that these circulars are binding on assessing authorities. The petitioner contended that based on these circulars, the respondent should have re-opened the assessment and considered the declaration forms submitted by the petitioner.

Availability of Appellate Remedy: The respondent objected to the writ petition, stating that the petitioner had failed to avail the appellate remedy by not filing an appeal within the prescribed period of limitation. However, the court, without delving into the merits of the matter, relied on the circulars issued by the Commissioner of Commercial Taxes and allowed the writ petition. The court quashed the impugned assessment order and remanded the matter back to the respondent for fresh orders, directing the petitioner to pay a specified percentage of the tax and instructing the respondent to consider the representations and declaration forms submitted by the petitioner within a specified time frame.

This comprehensive analysis of the judgment highlights the issues involved, the arguments presented by the parties, and the court's decision based on the legal principles and administrative circulars cited during the proceedings.