2016 (11) TMI 547 - HC - VAT and Sales Tax

Maintainability of appeal - Doctrine of merger - whether the petitioner was entitled to concessional rate of tax, in the absence of appropriate Declaration Forms? - Held that - This very issue came up for consideration before this Court in the case of ARTIS LEATHERS v. THE ASSISTANT COMMISSIONER (CT) AND ANR 2016 (9) TMI 824 - MADRAS HIGH COURT where the Appellate Authority refused to entertain the Appeal on the ground that it was passed as against the rectified order under section 84 of the TNVAT Act - it was held in the case that there is a clear and a real distinction between an order allowing an application for rectification and thereby rectifying or modifying the original order of assessment and an order rejecting an application for rectification. When the rectification proceedings resulted in a positive action, which has the effect of destroying the finality of original assessment, thereby reopening the assessment order itself, then the provisions relating to appeal would lie. On the other hand, when the Assessing Officer refuses to interfere with the original order and that order is allowed to remain intact, the said order would not be amenable normally to appeal remedy. In so holding, this Court referred to the provisions under Section 55(4) of the Tamil Nadu General Sales Tax Act, 1959, inserted by Amendment Act No. 31 of 1972, providing for appeal and revision remedy when an order of rectification is made, and not when the authority concerned refuses to pass an order of rectification. The proper interpretation that should be given to the case on hand is that the order rectifying the original assessment order should stand merged with the original assessment order dated 31.05.2016 and the Appeal is maintainable against the said revised order on account of merger. Thus, the impugned memo issued by the second respondent is not sustainable in law. Whether the remittance of 25% of the disputed tax was within the time permissible? - Held that - on the date of presenting the Appeal on 12.07.2016, 25% of the disputed tax was not paid. However, within a short period, i.e subsequent to the Assessing Officer giving credit the Declaration Forms, revised assessment order was passed and as per the revised order, the petitioner has remitted 25% of the disputed tax. Therefore, for all purposes, the date of remittance of ₹ 3,55,000/-, being the 25% of the disputed tax should be taken as the proper pre-deposit for entertaining the Appeal. Petition allowed - petitioner is directed to re-present appeal before the second respondent within a period of two weeks from the date of receipt of a copy of this order and the second respondent shall take the Appeal on file by reckoning the pre-deposit and decide the Appeal on merits and in accordance with law. It is also open to the first respondent to pass appropriate orders on the stay petition filed by the petitioner.

Summary

Issues involved:
1. Entertainability of Appeal against rectified order under TNVAT Act.
2. Timeliness of pre-deposit for Appeal.

Entertainability of Appeal against rectified order under TNVAT Act:
The petitioner, a registered dealer under TNVAT Act and CST Act, filed an Appeal against the rectified order passed by the Assessing Officer. The Appellate Authority initially rejected the Appeal as not entertainable. However, the High Court, citing precedent, clarified that the rectified order stands merged with the original assessment order, making the Appeal maintainable due to the merger. Referring to previous judgments, the Court emphasized that an order rectifying the original assessment allows for an appeal, contrary to an order rejecting rectification. The Court held that the Appellate Authority erred in deeming the Appeal not entertainable, directing the Appeal to be considered on its merits.

Timeliness of pre-deposit for Appeal:
The petitioner, upon receiving a revised assessment order, remitted 25% of the disputed tax as per the revised amount. The Appellate Authority initially questioned the timeliness of this pre-deposit, as it was not paid at the time of filing the Appeal. The High Court, however, deemed the subsequent payment as valid, considering it timely as it was made promptly after the revised assessment order. The Court directed the petitioner to re-present the Appeal within two weeks, factoring in the pre-deposit, and instructed the authorities not to take coercive action for tax recovery during this period. Additionally, the Court allowed the first respondent to decide on the stay petition filed by the petitioner.

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