2021 (12) TMI 1376 - HC - VAT and Sales Tax

Time Limitation for re-opening of the assessment - rejection on the ground that the amendment of Section 27(1) of the Act was made in the year 2012 vide G.O.Ms.No.82 Commercial Taxes and Registration (B1) Department 18.06.2012 - Section 27 of the TNVAT Act 2006 - HELD THAT - As far as the merits of the case for the Assessment Year 2011-2012 is concerned this Court is not inclined to entertain the plea particularly in the light of the fact that the petitioner has been negligent in not filing reply to the notices dated 22.06.2018 either within the time stipulated in the notices dated 22.06.2018 or after the expiry of time sought for by the petitioner by letter dated 19.07.2018 was granted - The only fault lies in the entire proceedings is that the respondent has not called the petitioner for a personal hearing before passing impugned Assessment Orders. However the fact remains that the petitioner was also. This Court is incapable of deciding the case on merits merely based on the affidavit of the petitioner without any other documents. It is not possible for the Court to get into the disputed questions of fact - considering the fact that the petitioner is facing huge demand of tax and penalty this case is remitted back to the respondent to reconsider the issue subject to the petitioner depositing a 25% of the demand in the respective impugned Assessment Orders as a condition for the case to be heard. The amount shall be deposited by the petitioner within a period of three months from the date of receipt of a copy of this order. Writ petition disposed off.

Summary

Issues:
Challenging Assessment Orders under Central Sales Tax Act, 1956 for multiple Assessment Years; Inclusion of exempted turnover and interstate sales turnover in tax demand; Violation based on decision in JKM Graphics Solutions case; Proposal for penalty levy under Section 27 of TNVAT Act, 2006; Lack of personal hearing before passing Assessment Orders; Limitation for revising Assessment Year 2011-2012; Failure to respond to notices issued by petitioner; Request for extension of time for reply; Negligence in filing reply to notices; Lack of personal hearing; Disputed questions of fact in the case; Remittance of 25% of demand as condition for reconsideration; Quashing of Assessment Orders upon compliance.

Analysis:
The petitioner challenged Assessment Orders for multiple years under the Central Sales Tax Act, 1956, arguing against the inclusion of exempted and interstate sales turnover in tax demands. The petitioner contended a violation based on the JKM Graphics Solutions case, emphasizing the improper basis for demanding tax. The petitioner cited legal precedents and a circular to support their case, highlighting inconsistencies in the Assessment Orders.

Regarding penalty levy under Section 27 of the TNVAT Act, 2006, the petitioner argued that no proposal for penalty was made in the initial notices, questioning the subsequent penalty imposition. The petitioner also raised concerns about the lack of a personal hearing before the Assessment Orders were passed, emphasizing the importance of procedural fairness in such matters.

An important issue arose concerning the limitation for revising the Assessment Year 2011-2012, with the petitioner claiming the revision was time-barred. However, the court rejected this argument, citing the relevant amendment and the six-year limitation period for reopening assessments in case of turnover escapement.

The court noted the petitioner's failure to respond to the notices issued, leading to a lack of engagement in the assessment process. Despite acknowledging the absence of a personal hearing, the court found it unable to delve into the disputed factual questions solely based on the petitioner's affidavit.

Ultimately, the court remitted the case back to the respondent for reconsideration, subject to the petitioner depositing 25% of the demand within three months. Compliance with this condition would result in the quashing of the Assessment Orders. Failure to remit the amount would lead to dismissal of the Writ Petitions. If the petitioner complies, they are granted two weeks to file a reply, with the respondent directed to dispose of the case within three months thereafter. The Writ Petitions were disposed of with these directions, without costs.