2016 (12) TMI 755 - HC - VAT and Sales Tax

Validity of order of assessment - change in place of business - assessment circle has been now shifted to the jurisdiction of the second respondent - principles of natural justice - Held that - On a bare perusal of the impugned assessment order, dated 06.01.2015, it shows that the petitioner did not have any opportunity to submit their objections and the impugned assessment order has been passed without even issuing a show-cause notice. This is sufficient to hold that the impugned order has been passed in violation of principles of natural justice. Nevertheless, in respect of the transactions covered by the C forms, the first respondent has given credit to the those C forms and applied the concessional rate of tax. But, however, with regard to the transactions not covered by C forms, the higher rate of tax has been imposed and the export documents were not called for and considered. Therefore, the claim for exemption was totally disallowed - Since this Court has convinced that the impugned assessment order dated 06.01.2015 is in violation of principles of natural justice, the same is required to be set-aside in so far as revised higher rate of tax in respect of transactions not covered by C forms and in respect of dis allowance of the exemption on account of not considering the export documents and transit sale documents. Therefore, to that instant, the impugned order dated 06.01.2015 is quashed. Having held so, the impugned demand, dated 28.04.2016 also required to be set-aside with further directions. At this juncture, it is relevant to point out the Circular issued by the Principal Commissioner, dated 28.02.2011 with regard to acceptance of the statutory forms - The above circular issued by the Commissioner binds the assessing officer. Therefore, belated production of Form C declarations cannot be a sole ground to reject the same. That apart, the first respondent while completing the assessment did not consider the export sale documents and the transit sale documents nor those documents were called for, but assessment was completed ex-prate. Therefore, Form C declarations that the petitioner may produce and the export documents and the transit sale documents should be considered by the second respondent. The Writ Petition is allowed and the impugned order order is set-aside and the matter is remanded to the second respondent for fresh consideration, who shall direct the petitioner to appear for personal hearing and permit the petitioner to produce Form C declarations, export documents and transit sale documents etc., and on perusal of those documents and after hearing the petitioner s objections, the assessment shall be redone in accordance with law - appeal allowed by way of remand.

Summary

Issues: Violation of principles of natural justice in passing assessment order, refusal to consider export documents for exemption, applicability of Circular on acceptance of statutory forms

In this judgment by the Madras High Court, the petitioner, a registered dealer under the TNVAT Act and CST Act, challenged an assessment order dated 06.01.2015 passed by the first respondent and a subsequent demand dated 28.04.2016 issued by the second respondent. The petitioner shifted their place of business, leading to a change in the assessment circle to the jurisdiction of the second respondent. The impugned order related to the production of Form 'C' declaration and export documents for concessional tax rates and exemption. The petitioner sought revision under Section 55 of the Act due to the refusal to consider export documents, which led to a higher tax rate being imposed for transactions not covered by 'C' forms. The court noted that the assessment order was passed without giving the petitioner an opportunity to submit objections, violating principles of natural justice.

The court found that the impugned assessment order failed to comply with the principles of natural justice as the petitioner was not given a chance to present objections before the order was passed. While the first respondent accepted 'C' forms for certain transactions, they imposed a higher tax rate for transactions not covered by 'C' forms and disallowed exemption by not considering export documents. Consequently, the court set aside the assessment order dated 06.01.2015 due to the violation of natural justice and directed the second respondent to reconsider the matter. The court also highlighted a Circular issued by the Principal Commissioner regarding the acceptance of statutory forms, emphasizing that belated production of Form 'C' declarations should not be the sole ground for rejection. The court instructed the second respondent to consider the 'C' declarations, export documents, and transit sale documents provided by the petitioner during the fresh assessment.

Ultimately, the court allowed the Writ Petition, setting aside the impugned order and remanding the matter to the second respondent for a fresh assessment. The second respondent was directed to allow the petitioner a personal hearing and consider the Form 'C' declarations, export documents, and transit sale documents to redo the assessment in accordance with the law. The judgment concluded without imposing any costs on the parties involved.