2016 (9) TMI 1515 - HC - VAT and Sales Tax

Validity of assessment order - CST Act - TNVAT Act - non-production of C-Forms declarations - principles of natural justice - HELD THAT - It is clear that there is some factual discrepancy in the matter, which the petitioner did not properly explain with records, though the petitioner has submitted a three page objections on 5.2.2016, to the pre-assessment notice dated 19.1.2016. Considering the fact that the petitioner has been regularly and promptly paying the tax, this Court is of the view that one more opportunity be granted to the petitioner to appear before the Assessing Officer and place all materials. However, that would be with certain conditions - Accordingly, the petitioner is directed to pay tax at 2% on the turnover on which the C-Declaration Forms have been produced and tax at the rate of 5% on the turnover for which the C-declaration Forms have been produced and tax at the rate of 5% on the turnover for which C-Declaration Forms have not been produced. Petition disposed off.

Summary

Issues:
Challenge to assessment order under CST Act for the year 2013-14. Interpretation of turnover for tax liability determination based on C-Declarations. Discrepancy in factual explanation by the petitioner. Granting another opportunity to the petitioner for assessment.

Analysis:

The petitioner, a registered dealer under TNVAT Act and CST Act, challenged the assessment order for the year 2013-14 under the CST Act. The primary issue raised was the determination of tax liability based on turnover with and without C-Declarations. The petitioner contended that the total turnover assessed by the respondent was not adequately explained, leading to confusion regarding the tax calculation.

The Assessing Officer justified the assessment, citing excess quantity in the C-Forms produced by the petitioner. However, the petitioner failed to provide a satisfactory explanation for the factual discrepancy, despite submitting objections to the pre-assessment notice. Recognizing the need for clarity, the Court decided to grant the petitioner another opportunity to present all relevant materials before the Assessing Officer.

In light of the petitioner's consistent tax payments, the Court directed the petitioner to pay tax at 2% on turnover with C-Declarations and 5% on turnover without C-Declarations. The petitioner was given two weeks to make the payment and an additional two weeks to file a petition under section 84 of the Act, supported by necessary documents for reassessment by the Assessing Officer. The Court also ordered the lifting of the Bank Attachment imposed earlier.

Ultimately, the Writ Petition was disposed of with the specified conditions, emphasizing no costs to be incurred. The connected Miscellaneous Petition was closed accordingly, bringing the matter to a conclusion.