2017 (7) TMI 829 - HC - VAT and Sales Tax

Levy of penalty - Held that - this writ petition is allowed clarifying that the Department is always at liberty to seek for any documents or any books in accordance with law in respect of any details as and when required - decided in favor of petitioner.

Summary

Issues involved:
Challenge to order dated 18.06.2004 seeking Writ of Certiorari to quash the order.

Analysis:
The petitioner sought to quash an order passed by the 1st respondent dated 18.06.2004 through a Writ of Certiorari. The counsel for the petitioner argued that the issue in this petition aligns with a previous decision related to the assessee's group company in W.P.No.17466 of 2008 dated 01.12.2014, albeit concerning the levy of penalty. The matter was adjourned for the Government Advocate to provide instructions, who later confirmed that the issue was covered by the decision in W.P.No.17466 of 2008. The previous case involved a challenge to an order under the Tamil Nadu General Sales Tax Act, 1959 for the year 2005-06. The court allowed the writ petition based on the exemption of 'appalam' and 'pappad' by the Sales Tax department since 1989. The court emphasized that the department cannot levy tax on exempted goods and criticized the show cause notice for proposing penalties on already exempted items. Referring to a Supreme Court decision, the court highlighted that 'appalam' and 'pappad' are considered the same, and any distinction made by the authorities is unwarranted. As the assessment was completed and the item was exempted, the court set aside the impugned order and allowed the writ petition, emphasizing that no further proof was required when the item was already exempted.

The court's decision was based on the clear exemption of 'appalam' and 'pappad' by the Sales Tax department since 1989, emphasizing that the authorities cannot levy tax on goods already exempted. The court highlighted a Supreme Court decision stating that 'appalam' and 'pappad' are the same, further reinforcing that no distinction should be made between them. The court criticized the show cause notice for proposing penalties on an item already exempted, emphasizing that no further proof was necessary when the item was already exempted and the assessment was completed. Consequently, the court set aside the impugned order and allowed the writ petition, clarifying that no costs were applicable and that the department could request documents or books in accordance with the law if needed.