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2016 (9) TMI 969 - HC - VAT and Sales TaxRejection of settlement application under Section 6(3) of the Settlement Act - settlement of arrears of Sales Tax - Tamil Nadu Sales Tax (Settlement of Arrears) Act, 2010 - applications filed by petitioner under the Settlement Act, dated 30.12.2010 - applications filed by the petitioner were put in cold storage by the competent authority - after about five years show cause notices issued to the petitioner for the assessment years 1997-1998 and 1991-1992, dated 19.12.2015 and 11.01.2016 stating that the petitioner has not paid 90% of the amount payable under Section 7 of the Act along with the applications and proposed to reject the applications under Section 6(3) of the Settlement Act - Held that - the impugned orders have been passed on account of total non-application of mind and without appreciating the scope and object of the Settlement Act. The assessment for the relevant years 1997-1998 and 1991-1992 should be revised and there was a statutory duty on the part of the Assessing Officer to pass the revised assessment orders and for reasons best known, the Assessing Officer has not done so, therefore, the dealer cannot be blamed for the inaction on the part of the Assessing Officer, therefore, the designated authority under the Settlement Act should call for entire files or in the alternative direct the Assessing Officer to pass revised assessment orders in terms of the orders passed by the Appellate Authority and thereafter, examine the applications filed by the petitioner, on merits and in accordance with law. Matter remanded - petition allowed - decided in favor of appellant.
Issues: Application of Settlement Act, Rejection of applications, Pending appeals affecting applications, Revision of assessment orders.
Application of Settlement Act: The petitioner, a registered dealer under the TNGST Act, filed applications under the Tamil Nadu Sales Tax (Settlement of Arrears) Act, 2010. The applications were put on hold by the competent authority, citing non-payment of 90% of the amount payable under Section 7 of the Act. The petitioner argued that the tax arrears were based on orders passed by the Appellate Assistant Commissioner and that revised assessment orders were not received. The 3rd respondent rejected the applications, stating that the arrears had been disposed of by the Appellate Forum and were not pending for collection when the Scheme came into force. Rejection of Applications: The High Court found that the impugned orders were passed without proper application of mind and understanding of the Settlement Act. Previous judgments were cited to emphasize the procedural requirements for applications under the Act. The Court highlighted the dealer's duty to calculate and pay the amount payable under Section 7, with strict limits defined by the statute. The Act places the onus on both the dealer and the assessing officer to ensure accurate payment calculations and verification. Pending Appeals Affecting Applications: The Court addressed the issue of pending appeals and their impact on the settlement applications. It was held that the rejection of applications based on pending appeals or remanded assessment orders was not tenable. Previous cases were cited to support the view that the benefit of the settlement scheme should not be denied to dealers due to subsequent orders passed after remand. The Court emphasized that the rejection of applications on such grounds was procedurally irregular and unsustainable in law. Revision of Assessment Orders: The Court noted that the Appellate Authority had partially allowed the appeals, necessitating the revision of assessment orders for the relevant years. The Assessing Officer was found to have a statutory duty to pass revised assessment orders based on the Appellate Authority's decisions. The Court held that the dealer should not be blamed for the Assessing Officer's inaction and directed the designated authority under the Settlement Act to consider the applications filed by the petitioner in accordance with law. In conclusion, the High Court allowed the Writ Petitions, quashed the impugned orders, and remanded the matters to the 3rd respondent to proceed in line with the legal position outlined in the judgment. The Court emphasized the importance of following statutory procedures and ensuring proper application of the Settlement Act in dealing with tax arrears and applications for settlement.
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