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2017 (5) TMI 925 - HC - VAT and Sales TaxLevy of purchase tax - purchase of unbranded snacks - Held that - the petitioner produced purchase bills and that it was verified and found in order in respect of proposal of Tax at S.Nos.3 to 7 of the items, out of which S.No.7 admittedly is in respect of purchase tax under Section 7(A) of unbranded (re-sale) at 4%. Therefore, it is evident that the petitioner had produced purchase details in respect of these snacks unbranded item and the same were verified and found in order by the Assessing Authority. A perusal of the notice dated 27.07.2007 would show that the respondent himself has admitted that the original order of assessment was made under Section 3D(1) of the TNGST Act, 1959, instead of levying under Item 29 of Part C of the First schedule to the said Act. It is clearly stated by the authority in the said notice that the assessment made under Section 3D(1) of the TNGST Act, was not in order. The impugned order cannot be sustained on the ground of limitation as well - petition allowed - decided in favor of petitioner.
Issues:
1. Challenging order passed under Section 55 of TNGST Act, 1959 2. Barred by limitation under Section 55(1) 3. Petitioner not recognized as Star Hotel 4. Allegation of purchasing snacks without furnishing bills 5. Violation of natural justice due to lack of personal hearing Analysis: 1. The petitioner challenged the order passed by the respondent under Section 55 of the TNGST Act, 1959, dated 21.10.2016. The petitioner contended that the proceedings were barred by limitation under Section 55(1) and raised objections on the merits of the assessment. The respondent issued a notice for revision under Section 55, claiming the petitioner to be a Star Hotel and alleging the purchase of snacks without proper documentation. 2. The petitioner argued that the proceedings were time-barred and that they were not a Star Hotel as presumed by the respondent. The petitioner also highlighted that the purchase details for snacks were provided during the original assessment, contradicting the allegations made in the revision notice. The petitioner emphasized that the impugned order lacked proper application of mind and violated natural justice by not providing a personal hearing. 3. The respondent contended that the notice issued under Section 55 was actually under Section 16 of the Act, and the higher tax rate was justified due to the petitioner's recognition by ITDC. However, the Court found that the respondent had committed factual errors in the assessment process, as evidenced by discrepancies between the original assessment order and the revision notice. 4. The Court noted that the respondent mistakenly issued the revision notice regarding the purchase of snacks, which had already been verified and found in order during the original assessment. Additionally, the Court observed that the respondent's claim of the petitioner being a Star Hotel was based on an incorrect assessment made under Section 3D(1) instead of the appropriate provision, leading to a lower tax rate. 5. Ultimately, the Court ruled in favor of the petitioner, setting aside the impugned order of assessment. The Court found that the order was passed after the limitation period and contained factual errors. The Court did not remit the matter back to the Authority for a fresh assessment due to the procedural and substantive deficiencies in the impugned order.
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