2016 (10) TMI 147 - HC - VAT and Sales Tax

Restoration of appeal - Doctrine of merger - manufacturer of finished leathers, cotton yarn and shoe uppers - TNVAT Act, 2006 - rectification of mistake under Section 84 of the TNVAT Act - 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? - the revenue did not prefer any appeal against the order passed by the Assessing Officer entertaining the petition under Section 84 of the TNVAT Act and rectifying the mistakes in the assessment order dated 10.2.2015. - the exercise adopted by the second respondent was uncalled for. Maintainability - whether the second respondent was justified in rejecting the appeal as not entertainable? - Held that - the decision in the case of The State of Tamil Nadu rep. by the Deputy Commissioner (CT) Versus Sabarigiri Industries 2014 (3) TMI 193 - MADRAS HIGH COURT has been relied upon. The order passed by the Assessing Officer under Section 84 of the TNVAT Act stood merged with the order of assessment dated 10.02.2015. Thus, in effect, the order of assessment passed against the petitioner is a modified order or rectified order passed pursuant to the exercise of powers under Section 84 of the TNVAT Act - appeal entertain-able. Appeal restored - writ petition allowed - decided in favor of petitioner.

Summary

Issues:
1. Rejection of appeal petition by the second respondent as not entertainable.
2. Correctness of the order passed by the Assessing Officer.
3. Justification of the second respondent in rejecting the appeal.
4. Maintainability of the appeal based on previous legal judgments.

Issue 1: Rejection of Appeal Petition
The petitioner, a manufacturer of finished leathers, cotton yarn, and shoe uppers, challenged the order of the appellate authority, the second respondent, which rejected the appeal petition in A.P.VAT No.76/2015 as not entertainable. The petitioner had filed rectification petitions under Section 84 of the TNVAT Act, highlighting various issues, out of which only specific matters were considered by the appellate authority.

Issue 2: Correctness of the Assessing Officer's Order
The Assessing Officer passed an order on 10.2.2015, which was subsequently rectified based on the petitioner's applications for rectification of certain mistakes. The rectification order was issued on 26.2.2016. The appeal to the second respondent was primarily focused on specific issues, such as ITC reversal, invisible loss, and cash discount. The appellate authority's extensive commentary on the Assessing Officer's actions was deemed unnecessary by the court.

Issue 3: Justification of Rejecting the Appeal
The court found that the Appellate Authority's rejection of the appeal as not entertainable was incorrect. The order passed by the Assessing Officer under Section 84 of the TNVAT Act merged with the original assessment order, making it a modified or rectified order. The court referenced a previous case to support the view that the appeal should have been entertained due to the modified assessment order.

Issue 4: Maintainability of the Appeal
Citing legal precedents and Section 55(4) of the Act, the court emphasized that when rectification proceedings result in modifying the original assessment order, an appeal remedy is applicable. The court referred to previous judgments to establish that an order allowing rectification opens the door for appeal, while a refusal to rectify does not warrant an appeal. Based on these principles, the court allowed the writ petition, set aside the impugned order, and directed the second respondent to hear and decide the appeal on its merits and in accordance with the law.

This detailed analysis of the judgment addresses the rejection of the appeal petition, the correctness of the Assessing Officer's order, the justification for rejecting the appeal, and the maintainability of the appeal based on legal precedents and relevant sections of the Act.