2021 (6) TMI 1055 - HC - VAT and Sales Tax

Validity of assessment order - assessments were not completed, by operation of law as per the amendment under Section 22(2) of the Tamil Nadu Value Added Tax Act, 2006 - deemed assessments - allegation is that the impugned orders were (passed) without any jurisdiction - HELD THAT - The petitioner has questioned the correctness of the reassessment order dated 16.11.2016 and 08.12.2016 for the Assessment Years 2008-2009 and 2009-2010 under the provisions of the Central Sales Tax Act, 1956 respectively. For the purpose of assessment under the provisions of the Central Sales Tax Act, 1956, the provisions of the Tamil Nadu Value Added Tax Act, 2006 has been made applicable. The petitioner had been issued with notices dated 28.12.2011 for the assessment year 2008-2009 and notice dated 06.11.2014 wherein the petitioner was called upon to furnish Form C in respect of which the petitioner had paid Central Sales Tax at concessional rate of duty under Section 8 of the Central Sales Tax Act, 1956. Though, notices were issued to the petitioner on the date mentioned above, the petitioner however failed to respond the same. It is not clear why the petitioner failed to furnish the records earlier to substantiate sale effected to register dealers outside the State against Form C. It is also not clear as to why, the petitioner did not respond to the notices issued earlier even though the respondent has filed documents/postal acknowledgments evidencing service of the respective notices issued to the petitioner calling upon the petitioner to file Form C - from the documents that have been filed before this Court, what is discernible is that the petitioner has attempted to take advantage of alleged fire accident on 13.08.2012 in one of its godown and the flood that ravaged the city of Chennai in November-December, 2015 to its advantage. Barring an averment in the affidavit, there is no document to substantiate the fire accident. There is also no explanation forthcoming from the petitioner as to why the documents were not furnished earlier even though notices were served on the petitioner - there was no excuse for the petitioner to not to file Form C. It cannot shy away from its statutory liability and responsibility to establish that the transactions in respect of which claimed concession Inter-State sale against Form C to registered dealers outside the State of Tamil Nadu and still not file the same. In the present case, though reassessment notice dated 28.12.2011 was served for the Assessment Year 2008-2009 to the petitioner, by virtue of the fiction introduced in proviso to Section 22 (2) of the Tamil Nadu Value Added Tax Act 2006, there was deemed assessment on 30.06.2012 - the respondent could only issue a notice under section 27 of the Tamil Nadu Value Added Tax Act, 2006 to revise the deemed assessment. However, the respondent has proceeded to pass the impugned orders dated 14.11.2016 and 08.12.2016 as if the old provisions were in force. The impugned orders which stands quashed now by this order shall be treated as notice issued to the petitioner under section 27 of the Tamil Nadu Value Added Tax Act, 2006 for the respective assessment years - Petition disposed off.

Summary

Issues Involved:
1. Jurisdiction of the impugned assessment orders.
2. Applicability of amendments to the Tamil Nadu Value Added Tax Act, 2006.
3. Petitioner's inability to furnish records due to fire and flood incidents.
4. Limitation period for issuing notices and reassessment.
5. Compliance with procedural requirements for concessional tax rates under the Central Sales Tax Act, 1956.

Detailed Analysis:

1. Jurisdiction of the Impugned Assessment Orders:
The petitioner challenged the assessment orders for the years 2008-2009 and 2009-2010 under the Central Sales Tax Act, 1956, claiming they were passed without jurisdiction. The petitioner argued that the orders were invalid due to the amendments made to the Tamil Nadu Value Added Tax Act, 2006, effective from 19.06.2012, which introduced the concept of deemed assessment. The court noted that the impugned orders were passed without considering the deemed assessment provisions, thus lacking jurisdiction.

2. Applicability of Amendments to the Tamil Nadu Value Added Tax Act, 2006:
The petitioner contended that the amendments to the Tamil Nadu Value Added Tax Act, 2006, effective from 19.06.2012, resulted in deemed assessments for the years 2008-2009 and 2009-2010. The court acknowledged that, according to the amended Section 22(2), assessments for the years 2006-2007 to 2010-2011 were deemed completed on 30.06.2012. Therefore, any further assessment should have been conducted under Section 27 of the Act.

3. Petitioner's Inability to Furnish Records Due to Fire and Flood Incidents:
The petitioner claimed that a fire in August 2012 and floods in December 2015 resulted in the loss of records, making it impossible to furnish the required documents. The court found this argument unconvincing, noting the lack of evidence to substantiate the fire incident and the improbability of not being able to retrieve records in the digital age. The court emphasized the petitioner's responsibility to maintain and produce records.

4. Limitation Period for Issuing Notices and Reassessment:
The court examined whether the notices issued for reassessment were within the limitation period prescribed under Section 27 of the Tamil Nadu Value Added Tax Act, 2006. It was determined that the notices were issued within six years from the date of deemed assessment, thus falling within the permissible period. However, the court noted that the impugned orders were incorrectly titled as deemed assessments, which did not invalidate them but required correction.

5. Compliance with Procedural Requirements for Concessional Tax Rates:
The respondent argued that the petitioner failed to furnish Form C for inter-state sales, which is mandatory for claiming concessional tax rates under Section 8 of the Central Sales Tax Act, 1956. The court referenced the Supreme Court's decision in India Agencies (Regd.), Bangalore Vs Additional Commissioner of Commercial Taxes, Bangalore, which emphasized strict compliance with procedural requirements. The court agreed that without the original Form C, the petitioner could not claim the concessional rate of tax.

Conclusion:
The court quashed the impugned assessment orders due to procedural errors and lack of jurisdiction but treated them as notices under Section 27 of the Tamil Nadu Value Added Tax Act, 2006. The respondent was given the liberty to issue a corrigendum within 30 days, and the petitioner was allowed to file a reply to substantiate its case. The respondent was directed to pass appropriate orders on merits within 90 days. The writ petitions were disposed of with these observations, and no costs were awarded.