2016 (11) TMI 1261 - HC - VAT and Sales Tax

Interpretation of Notification dt 12.7.2004 - turnover tax - composition scheme - turnover tax is payable on the basis of annual turnover and not on the basis of quarterly turnover as laid down in sec.13A of the Act - Held that - a bare perusal of section 13A itself makes it explicitly clear when it mentions whose total turnover in a year exceeds 3 lac rupees should mean that it has to be computed on the basis of annual turnover and not on the basis of proportionate or part of the turnover or quarterly. Admittedly, Notification dt 12.7.2004 with regard to the assessment of the turnover tax and the exemption fee in lieu of turnover tax had been rescinded, therefore, assessment of the annual turnover or the exemption fee on any part of the same of the assessee for the assessment year 2004-05, could not be made applicable - The Tax Board, in my considered opinion has correctly interpreted the Notifications and the view which has been taken by the Tax Board appears to be just and proper and is not required to be interpreted differently than what has been expressed by the Tax Board and taking into consideration the aforesaid view of the Tax Board, which I do concur, in my view it being a finding of fact based on evidence, no question of law arises out of the order of Tax Board. I find no perversity or illegality in the order of Tax Board so as to call for interference of this court - petition dismissed - decided against the revenue.

Summary

Issues: Interpretation of turnover tax levy based on annual vs. quarterly turnover; Consideration of relevant Notifications for retrospective vs. prospective application.

Analysis:
1. Interpretation of turnover tax levy: The judgment dealt with the issue of whether turnover tax should be levied based on annual turnover or quarterly turnover. The assessees contended that turnover tax should be based on annual turnover, while the Assessing Officer and Dy. Commissioner (Appeals) applied it on a quarterly basis. The Tax Board, after considering relevant provisions and Notifications, ruled in favor of the assessees, allowing the appeals. The court analyzed Section 13A of the Act, emphasizing that turnover exceeding a certain threshold in a year should be computed based on annual turnover, as explicitly stated in the section.

2. Consideration of Notifications for retrospective vs. prospective application: The Revenue's counsel argued that the Tax Board's decision did not consider relevant Notifications and should have applied the law prospectively, rather than retrospectively. The counsel contended that the Notifications were clarifications and should not impact the application of the law. However, the court disagreed, stating that the rescinded Notification regarding turnover tax assessment for the relevant assessment year meant that the annual turnover or exemption fee could not be applied proportionately. The court upheld the Tax Board's interpretation of the Notifications, finding it just and proper.

3. Final Decision: The court found no legal question arising from the Tax Board's order, as it was based on factual evidence and a correct interpretation of the law and Notifications. The judgment concluded that there was no perversity or illegality in the Tax Board's decision, leading to the dismissal of the petition for lack of merit. The court emphasized that the Tax Board's decision was a finding of fact based on evidence, warranting no interference from the court. The order directed the placement of a copy in each connected file, concluding the case.