2016 (10) TMI 372 - HC - VAT and Sales Tax

Levy of penalty under Section 27(3) - revision of assessment - TNVAT Act, 2006 - CST Act, 1956 - branded bakery products - Held that - these revision of assessment under Section 27(1)(b) of the TNVAT has been done by the respondent to increase the rate of tax on the ground that the petitioner has been selling branded bakery products. The revision of the assessment is done under Section 27(2) of the Act, therefore levy of penalty under section 27(4) of the TNVAT Act and under ection 27(3) of the TNVAT Act is not correct. The petitioner has withdrawn the application filed before the Trade Marks Registry and has got sufficient proof to show that the same has been withdrawn as early as on 03.10.2013, - one more opportunity given to the petitioner to produce proof of withdrawal of application. Matter remanded for fresh consideration and the respondent directed to issue a fresh notice and after affording an opportunity of personal hearing to the petitioner, shall re-do the assessment in accordance with law - petition allowed - decided in favor of petitioner.

Summary

Issues:
1. Challenge to revised assessment under TNVAT Act for the year 2010-2011.
2. Levying of penalty under Section 27 of the TNVAT Act.
3. Proof of withdrawal of application filed before the Trade Marks Registry.
4. Discrepancy in turnover amount for assessment.

Analysis:
1. The petitioner, a manufacturer and dealer in bakery products, challenged the revised assessment under the TNVAT Act for the year 2010-2011. The assessing officer had levied a higher rate of tax on branded bakery products, citing the petitioner's failure to provide proof of withdrawing their application filed before the Trade Marks Registry.

2. The petitioner contended that the penalty levied under Section 27(3) of the TNVAT Act was not justified as the revision of assessment was done under Section 27(1)(b), not Section 27(2). The court noted that the revision was indeed under Section 27(1)(b), leading to the question of whether a penalty could be imposed.

3. The petitioner sought to prove the withdrawal of their application before the Trade Marks Registry, crucial for avoiding the penalty. Despite delays in obtaining the necessary proof, the court acknowledged the withdrawal dated back to 2013, preceding the assessment notices. Consequently, the court set aside the penalty and granted the petitioner an opportunity to present the withdrawal proof.

4. An issue arose regarding a discrepancy in the turnover amount for assessment. The petitioner highlighted errors in the pre-revision notice, where a specific turnover amount was mistakenly added twice. The court clarified that the assessment should be based on the correct turnover figure and directed the respondent to provide full details for another turnover amount for effective objections.

In conclusion, the court allowed the writ petition, setting aside the impugned order and remanding the matter for fresh consideration. The respondent was instructed to issue a new notice, conduct a reassessment on the correct turnover amount, and afford the petitioner a personal hearing. The judgment addressed the issues of revised assessment, penalty imposition, withdrawal proof, and turnover discrepancies comprehensively.