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2016 (8) TMI 333 - HC - VAT and Sales TaxOrder of assessment levy of additional sales tax split in the turnover during different periods - circulars in exercise of powers under Section 28-A of the Tamil Nadu General Sales Tax Act - Held that - if in the very same financial year, different rates are to be worked out by virtue of prescription of such different rates, due to statutory amendments, the only exercise to be carried out would be to ascertain the period for which the different rates of tax are to be worked out assessment to be done fresh - writ petition allowed matter remanded.
Issues: Challenge to order of assessment under Tamil Nadu General Sales Tax Act; Failure to consider turnover split for different exemption periods; Binding nature of Circular under Section 28-A of the Act.
The petitioner, a dealer in Ball and Roller Bearings, challenged an assessment order under the Tamil Nadu General Sales Tax Act. The challenge was based on two grounds. Firstly, the petitioner argued that the assessing officer failed to consider the split in turnover between two exemption periods - one up to ?25 Crores and the other up to ?10 Crores. The issue revolved around the levy of Additional Sales Tax under the Tamil Nadu Additional Sales Tax Act, 1970. Secondly, the petitioner contended that the assessing officer did not take into account a Circular issued by the Commissioner, dated 14.12.2002, which was deemed to be binding on the assessee under Section 28-A of the Act. The respondent, in a counter affidavit, claimed that the Circular would not bind the assessing officer. However, it was argued that the Circular, being issued under Section 28-A of the Act, would indeed bind the assessee. Reference was made to a judgment of the Division Bench in the case of Philips India Limited, but a subsequent decision in the case of the State of Tamil Nadu vs. Tvl.National Time Company clarified the issue of splitting the year for assessment purposes. The court held that different rates of tax within the same financial year do not affect the liability created, allowing for the bifurcation of the financial year for calculating additional sales tax liability. Based on the above decision and the statutory Circular, the court directed the respondent to re-do the assessment. The writ petition was allowed, the impugned order was set aside, and the matter was remanded to the respondent for fresh consideration in line with the court's decision and the Circular. No costs were awarded in this case.
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