2017 (8) TMI 1201 - HC - VAT and Sales Tax

Validity of order passed by Deputy Commissioner (CT), Chennai - Penal interest under Section 24(3) - it was alleged that the petitioner has not reported the sales turnover of REP licence and the transaction is liable to be taxed at 8% - Held that - When I perused the order passed by the first revisional authority namely, the Deputy Commissioner (CT), Chennai, dated 03.11.2004, it appears that the said Officer has not approached the matter in a proper manner, as while setting aside the order of the Assessing Officer and remanding the matter for fresh consideration, virtually issued a positive direction to the Assessing Authority to levy penal interest under Section 24(3) of the TNGST Act - the matter is to be remanded for being considered afresh. Section 14 of the TNGST Act, would have no application to the facts of this case, as the revised return dated 31.03.2000, is not within the period of five years from the date of the original assessment, which is dated 30.09.1994. Though Section 14 speaks of re-assessment still there is an embargo on the part of the Assessing Officer to invoke Section 14 of the TNGST Act and obviously such power could not have been invoked in the instant case. Appeal allowed by way of remand.

Summary

Issues:
1. Dismissal of revision petition by the first respondent.
2. Affirmation of order by the Deputy Commissioner for fresh disposal.
3. Acceptance of revised return and subsequent assessment.
4. Demand for interest under Section 24(3) of the TNGST Act.
5. Proper approach in remanding the matter for fresh consideration.
6. Applicability of Section 14 of the TNGST Act to the case.

Analysis:

1. The petitioner, a registered dealer, challenged the order of the first respondent dismissing their revision petition against the Deputy Commissioner's order. The first respondent affirmed the Deputy Commissioner's decision to remand the matter for fresh disposal to levy penal interest under Section 24(3) based on a Supreme Court decision.

2. The case began with a revision notice for the assessment year 1993-94, alleging the petitioner's failure to report sales turnover of a license. Despite objections, an order was passed based on a revised return admitting the turnover. Subsequent legal proceedings challenged the assessment order's validity, leading to the current dispute over interest under Section 24(3) of the TNGST Act.

3. The High Court noted that the Deputy Commissioner's approach in remanding the matter lacked proper consideration. Given the legal uncertainty surrounding the taxable transactions and the failure to follow directions from the Special Tribunal, the Court deemed it appropriate to remand the matter entirely for fresh consideration.

4. The Additional Government Pleader argued that the petitioner's revised return and tax payment precluded them from contesting the interest levy. However, the Court found that Section 14 of the TNGST Act did not apply as the revised return was outside the five-year period from the original assessment date.

5. Consequently, the Court allowed the Writ Petition, setting aside the impugned order and remanding the matter to the Assessing Officer for fresh consideration in accordance with the law. The judgment highlighted the need for a comprehensive reassessment considering all relevant factors and legal developments.

By thoroughly analyzing each issue raised in the judgment, the High Court provided a detailed and reasoned decision, ensuring justice and legal principles were upheld in the matter at hand.