2017 (8) TMI 201 - HC - VAT and Sales Tax

Revision of assessment - Section 55 of the TNGST Act - C Forms - petitioner preferred an appeal before the appellate authority and when the appeal was heard, the petitioner produced two C Form declarations covering the taxable turnover of ₹ 1,64,790/- and requested to direct the assessing officer to accept the same and pass fresh orders allowing concessional rate of tax on the said turnover - whether the respondent could have invoked the powers under Section 55 of the TNGST Act for issuing the impugned notice? - Held that - Section 55 of the TNGST Act deals with powers to rectify any error apparent on the face of the record. This power is exercisable by the assessing authority or the appellate authority or the revisional authority within five years from the date of any order passed by it and rectify any error apparent on the face of the record. The proviso provides that if the rectification has the effect of enhancing the assessment or any penalty, notice to the dealer has to be issued and he should be allowed reasonable opportunity of being heard. The scope of the said Section was under considerable debate in a long line of decisions and as of now, it is a fairly well settled proposition that the scope of review is different from that of rectification as the review permits re-writing of the order for re-hearing of the case and in that, the important facts not available earlier, could be taken into account - the mistakes which will not fall within the parameters mentioned above, can only be rectified by filing an appeal or revision and this would equally apply when the matter pertains to the jurisdiction of the authority or validity of law. In certain cases, the writ Courts have entertained challenge to such orders in exercise of its powers under Article 226 of the Constitution of India. Equally well settled is the legal position that a mere change of opinion or facts even if new facts come to notice, cannot be a ground for reopening much less a case for rectification - decided in favor of the dealer and against the revenue. What is the other remedy available to the revenue in case they are of the opinion that the revised assessment orders are prejudicial to the interest of revenue? - Held that - The only power available for the Department is to invoke Section 32 of the TNGST Act, which deals with special powers of the Deputy Commissioner which gives suo motu jurisdiction to the Deputy Commissioner and the Joint Commissioner, respectively to scrutinize the orders of the assessing officer passed under various Sections subject to the conditions which are stipulated in the said provision. This Court has no hesitation to hold that the impugned notice issued by the assessing officer invoking Section 55 of the TNGST Act is without jurisdiction - petition allowed - decided in favor of petitioner.

Summary

Issues:
1. Jurisdiction to issue notice under Section 55 of the TNGST Act.
2. Interpretation of error apparent on the face of the record.
3. Remedies available to the revenue in case of prejudicial revised assessment orders.

Jurisdiction to Issue Notice under Section 55 of the TNGST Act:
The petitioner, a registered dealer, challenged a notice issued by the respondent invoking powers under Section 55 of the TNGST Act. The notice aimed to revise the assessment, arguing that the order passed by the assessing officer was without jurisdiction due to the merging of the original assessment order with the one passed by the Appellate Assistant Commissioner. The legal position, as established in various precedents, allowed for the acceptance of belated 'C' Forms if sufficient cause was shown. The Court emphasized that the respondent's invocation of Section 55 was unwarranted, as the error alleged was not apparent on the face of the record but required a detailed examination of facts and legal arguments.

Interpretation of Error Apparent on the Face of the Record:
The Court delved into the scope of Section 55 of the TNGST Act, which allows rectification of errors apparent on the face of the record by the assessing, appellate, or revisional authorities within five years of the order. It was clarified that rectification was limited to clerical and arithmetical errors and did not extend to matters requiring detailed investigation or consideration of new facts. The judgment cited cases where errors not falling within the parameters of Section 55 could be challenged through appeals or revisions, with the writ courts intervening in cases of jurisdictional or legal validity disputes. The respondent's argument that the error in the assessment order was apparent was refuted, highlighting the need for a clear, self-evident mistake for rectification under Section 55.

Remedies Available to the Revenue in Case of Prejudicial Revised Assessment Orders:
In case of revised assessment orders deemed prejudicial to revenue, the Department's recourse lay in invoking Section 32 granting special powers to the Deputy Commissioner for scrutiny of assessing officer's orders. Additionally, the Joint Commissioner could exercise special powers under Section 34, subject to specified conditions. The Court held that the impugned notice issued under Section 55 lacked jurisdiction and set it aside. It directed the Department to explore alternative statutory provisions under the TNGST Act for addressing any revenue concerns arising from the revised assessment orders.

This detailed analysis of the judgment from the Madras High Court provides insights into the legal intricacies surrounding the jurisdiction to issue notices under the TNGST Act, the interpretation of errors apparent on the face of the record, and the available remedies for revenue-related issues in the context of revised assessment orders.