2016 (7) TMI 854 - HC - VAT and Sales Tax

Demand of VAT in revision proceedings (re-assessment) - demand at higher rate of tax - the petitioner having paid lesser rate of tax, the respondent issued notices for revision of assessment. The petitioner was granted opportunity to submit their objections. - Held that - Tribunal had observed that, The contention of the Revenue is not acceptable because the Revenue has not proved with records that the dealer-respondents restaurant is registered with the Tourism Department of either State Government or Central Government and accredited with stage category in order to levy higher rate of tax as per the entries provided under the First Schedule of the Act. It is not in dispute that the above order passed by the Tribunal had become final. Therefore, for the self same reasons, once again the respondent is not entitled to re-open the assessment, especially in the absence of any tangible material for doing so. That apart, there is nothing stated in the impugned order nor in the pre-assessment notice as regards any fresh materials which were available with them to establish that the petitioner should also be treated as part of the Star rated lodging house. the Writ Petitions are allowed and the impugned assessment orders are quashed - Decided in favor of assessee.

Summary

Issues involved:
Challenging assessment orders for multiple years, re-opening of assessments on the same grounds, failure to consider previous tribunal orders, validity of assessment based on personal opinion, abdication of powers by the Assessing Officer, contempt of interim orders.

Analysis:
The petitioner, M/s Sakthi Hotels (Restaurant), challenged assessment orders for various years, including 2009-2010, 2010-2011, and 2011-2012. The respondent re-opened assessments without filing a counter affidavit or seeking to vacate the interim stay granted by the Court, leading to fresh orders dated 17.03.2015. The Court noted that re-opening assessments without new grounds was improper, especially after the Sales Tax Appellate Tribunal had previously rejected similar contentions raised by the respondent. The petitioner argued that they were a separate entity from a lodging house, and previous tribunal decisions supported their case. The Court emphasized the need for the Assessing Officer to independently evaluate evidence instead of relying solely on Enforcement Wing reports.

The Sales Tax Appellate Tribunal's earlier decision, which had become final, established that the petitioner was distinct from the lodging house and not subject to higher tax rates. The Court highlighted the respondent's lack of tangible material to justify re-opening assessments and failure to provide fresh evidence to link the petitioner to the star-rated lodging house. The Court found the re-opening of assessments while interim stay orders were in place amounted to contempt of court orders, further strengthening the petitioner's case.

In conclusion, the Court allowed the Writ Petitions, quashed the impugned assessment orders, and closed the connected Miscellaneous Petitions. The judgment emphasized the importance of following legal procedures, considering previous tribunal decisions, and respecting court orders to maintain the integrity of the assessment process.