2014 (8) TMI 818 - HC - VAT and Sales Tax

Works contract - nature of transaction done by the petitioner - AO assessed the dealer as works contactor - Held that - On perusal of the impugned order of assessment, it appears that it is not a mere typographical error but the assessing officer has approved to examine the transaction and state that the dealer having not exercised any option for payment of tax under Section 6(2) of the Act for the year 2009- 2010, the objection of the dealer is not acceptable. This Court is of the view that the specific issue pointed out by the petitioner has to be considered in the matter and the contention of the petitioner that they are not works contract dealer has also to be examined and thereafter, the Assessing Officer has to render a finding as regards the provisions of law which would stand attracted to the transaction made by the petitioner - Court is inclined to interfere with the order of assessment - matter remanded back for passing appropriate orders on merits - Decided in favour of assessee.

Summary

Issues: Challenge to assessment order under TN VAT Act 2006 for AY 2009-2010 based on misapplication of Section 6(2) - Typographical error in impugned order - Petitioner's contention of not being a works contract dealer - Interference by the Court.

Analysis:
1. The petitioner contested an assessment order under the Tamil Nadu Value Added Tax Act 2006 for the assessment year 2009-2010, challenging the revision made under Section 27(1)(b) of the Act, requiring payment at the dealer rate of tax.

2. The primary contention against the impugned order was that the petitioner's transactions did not qualify as those of a works contract dealer, arguing a misapplication of Section 6(2) of the Act.

3. Upon admission of the writ petition, the Additional Government Pleader was directed to provide clarifications, indicating the seriousness of the issue raised by the petitioner.

4. The petitioner's counsel emphasized that the petitioner had not opted for payment under Section 6(2) for the relevant year, asserting that this provision did not apply to the nature of transactions undertaken, thereby alleging a lack of proper assessment.

5. In response, the Additional Government Pleader accused the petitioner of attempting to exploit a typographical error in the order, suggesting a different interpretation of the situation.

6. The Court, after examining the assessment order, concluded that the issue raised by the petitioner regarding their status as a works contract dealer needed thorough consideration. The Court highlighted the necessity for the Assessing Officer to evaluate the nature of the transactions and determine the applicable legal provisions accurately.

7. Consequently, the Court decided to intervene in the assessment order, setting it aside and remitting the matter back to the respondent for a fresh review. The Assessing Officer was instructed to consider the petitioner's objections, conduct a personal hearing, and issue a new decision within four weeks, emphasizing compliance with the law. No costs were awarded, and the related miscellaneous petition was closed.