2015 (10) TMI 1573 - HC - VAT and Sales Tax

Determination of taxable turnover - Inclusion of discounts - Held that - The only ground taken by the appellants therein was that when the issue raised before the Assessing Officer was on an interpretation of a Circular issued by the Joint Commissioner and also covered by another decision in favour of one of the group companies, there was no necessity for the appellants to go to the appellate authority and exhaust all statutory remedies. This Court, accepting the contentions of the appellants therein, set aside the impugned orders and remanded the matter to the assessing authority for fresh consideration by taking into account the Circular of the Commissioner dated 04.11.2013 and the orders of assessment passed in respect of one of the group companies. - impugned order dated 3.7.2015 passed by the respondent is liable to be set aside and accordingly, the same is set aside. - matter remanded back - Decided in favour of assessee.

Summary

Issues:
Challenge to order of respondent dated 3.7.2015 under TNVAT Act regarding turnover discounts received by petitioner.

Analysis:
The petitioner, a registered dealer under TNVAT Act, challenged an order by the respondent levying tax on discounts received from a supplier on PVC pipes and fittings. The petitioner claimed the discounts were not part of taxable turnover. The respondent issued a notice without allowing objections, leading to the contested order on 03.07.2015. The petitioner argued that the circulars issued by the Commissioner of Commercial Taxes prohibited including discount turnover for tax calculation. The respondent's failure to consider these circulars and Section 19(20) of the TNVAT Act was noted by the court.

The court referred to a Division Bench judgment where a similar issue was addressed, emphasizing the importance of considering circulars and alternative remedies. The court set aside the impugned order and directed the respondent to reconsider the matter in light of the circulars and statutory provisions, granting the petitioner an opportunity to file objections within six weeks. The court highlighted the need for due process and adherence to legal provisions in tax assessments.

In conclusion, the court ruled in favor of the petitioner, setting aside the respondent's order and allowing the petitioner to submit objections for proper consideration. The judgment emphasized the importance of following circulars and statutory provisions in tax assessments, ensuring fair treatment and due process for taxpayers under the TNVAT Act.