2016 (9) TMI 768 - HC - VAT and Sales Tax

Validity of assessment order - mis-conception of facts - tender for supply and delivery of de-silting machines for sewer maintenance - levy of tax at 14.5% - tax at 5% as per a Government Order in G.O.Ms.No.77 dated 11.7.2011 issued by the Government of Tamil Nadu granting reduced rate of tax at 5% on the supply of any goods - pre-assessent notice or the assessment year 2013-14 and for the assessment year 2014-15 - failure to file objections for the year 2014-15 - death of partner who presented all evidences and documents and attended the personal hearing - grounds of mis-match in the pre-assessment notice - Held that - if the Authority has missed out certain vital factual information, there is sufficient power for the Authority to revise and rectify his orders in terms of Section 84 of the State Act. The petitioner should go before the Assessing Officer, file a petition under Section 84 of the State Act, point out all these factual inconsistencies and explain the scope of the contract. If that is done, then the first respondent shall re-consider the matter and examine as to whether there are any factual errors, which have crept in, while completing the assessment - writ petition disposed off - decided in favor of petitioner.

Summary

Issues:
1. Interpretation of tax laws and applicability of reduced tax rates.
2. Assessment procedures and factual errors in assessment orders.
3. Jurisdiction of the High Court in adjudicating factual issues in a writ petition.
4. Remedies available to rectify factual inconsistencies in assessment orders.

Analysis:

Issue 1: Interpretation of tax laws and reduced tax rates
The petitioner, a manufacturer of de-silting machines, was registered under the Tamil Nadu Value Added Tax Act, 2006. The petitioner claimed a reduced tax rate of 5% based on a Government Order. The petitioner filed returns deducting tax at 5% from the invoices raised on the second respondent Board and claimed input tax credit. However, the first respondent issued pre-assessment notices challenging this claim, leading to a dispute over the interpretation and application of tax laws.

Issue 2: Assessment procedures and factual errors
The High Court noted discrepancies in the assessment orders, highlighting factual errors such as misrepresentation of information in invoices and misapplication of relevant legal provisions. The petitioner's counsel argued that the deceased partner of the petitioner had provided necessary documents during the assessment process, contradicting the findings in the assessment orders. The Court emphasized that factual issues should be addressed through appropriate procedures rather than in a writ petition.

Issue 3: Jurisdiction of the High Court
The Court clarified that factual disputes should be resolved through the revisionary powers available under Section 84 of the State Act, emphasizing the role of the Assessing Officer in rectifying factual inconsistencies. The Court directed the petitioner to approach the Assessing Officer with a petition under Section 84, allowing for a thorough examination of the factual errors alleged in the assessment orders.

Issue 4: Remedies for rectifying factual inconsistencies
The Court disposed of the writ petitions by instructing the petitioner to file petitions under Section 84 within four weeks. The Assessing Officer was directed to conduct a detailed review, provide a personal hearing to the petitioner's representative, and evaluate the documents to address the alleged factual errors. The Court ordered the first respondent to reconsider the assessment in light of the rectified information and pass a speaking order in accordance with the law, while keeping the impugned orders in abeyance until the revision process is completed.

In conclusion, the judgment focused on the proper interpretation of tax laws, the necessity for accurate assessment procedures, the limited jurisdiction of the High Court in adjudicating factual issues, and the availability of remedies under Section 84 to rectify factual inconsistencies in assessment orders.