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2016 (9) TMI 824 - HC - VAT and Sales TaxRestoration of appeal petition - revision notice to petitioner to revise the total and taxable turnover - reversal of input tax credit - imposition of penalty - whether the second respondent was justified in rejecting the appeal as not entertainable? - Section 84 of the TNVAT Act - Held that - the decision in the case of State of Tamil Nadu v. Sabarigiri Industries 2014 (3) TMI 193 - MADRAS HIGH COURT apply - appeal maintainable. Rectification of assessment order - whether the petitioner has made out any grounds to interfere with the rectified assessment order, only with regard to the points which have been held against the petitioner? - Held that - as against the order of rectification passed resulting in the modification of the original order passed, the assessee has the right of appeal before the appellate forum. Appeal petition restored to the file of the second respondent, who shall hear and decide the appeal on merits and in accordance with law - appeal allowed - decided in favor of assessee.
Issues:
1. Entertainability of appeal petition rejected by the Appellate Authority. 2. Justification of rejecting the appeal as not entertainable. 3. Interpretation of the order passed by the Assessing Officer under Section 84 of the TNVAT Act. 4. Applicability of previous court decisions on similar issues. Entertainability of Appeal Petition: The petitioner, a dealer in hides and skins, contested the order passed by the second respondent, the Appellate Authority, which rejected the appeal petition in A.P.VAT No.73/2015 as not entertainable. The petitioner's objections were considered by the Assessing Officer, and most issues were resolved in favor of the petitioner except for one regarding invisible loss. The High Court noted that the Appellate Authority delved into unnecessary details regarding the Assessing Officer's actions, emphasizing that the appeal should focus on whether the petitioner presented grounds to challenge the rectified assessment order. The court highlighted that the appeal process is for the dealer's benefit, not the revenue's, and the Appellate Authority should assess the correctness of the order that dissatisfied the dealer. Justification of Rejecting the Appeal: The High Court scrutinized the Appellate Authority's decision to reject the appeal as not entertainable and deemed it incorrect. It clarified that the order under Section 84 of the TNVAT Act merged with the original assessment order, making the latter a modified or rectified order. Referring to a previous Division Bench decision, the court emphasized that when rectification results in modifying the original assessment, an appeal remedy is available. Conversely, if the Assessing Officer declines rectification, leaving the original order intact, an appeal remedy is typically not applicable. The court cited legal provisions and previous judgments to support the conclusion that the Appellate Authority erred in deeming the appeal not entertainable. Interpretation of Assessing Officer's Order: The High Court analyzed the Assessing Officer's order under Section 84 of the TNVAT Act, emphasizing that the rectification process altered the original assessment order. The court clarified that the appeal process should focus on the correctness of the Assessing Officer's decision that dissatisfied the dealer. It highlighted that the revenue did not appeal the rectification order, underscoring that the Appellate Authority's actions were unnecessary and unjustified. By referencing legal provisions and court decisions, the High Court established that the rectification process resulting in a modified order allows for an appeal remedy. Applicability of Previous Court Decisions: The High Court referenced a Division Bench decision in a similar case to support its analysis. It cited the distinction between rectification actions that modify the original order, warranting appeal, and those that leave the original order unchanged, typically not justifying an appeal. By aligning with previous court interpretations and legal provisions, the High Court concluded that the Appellate Authority's rejection of the appeal as not entertainable was erroneous. Consequently, the court allowed the writ petition, set aside the impugned order, and instructed the Appellate Authority to reconsider and decide the appeal on its merits and as per the law.
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