2017 (9) TMI 1046 - HC - VAT and Sales Tax

Jurisdiction - scope of powers under Section 55 of the TNGST Act - rectification of error - Held that - what was required to be done by the assessing officer is to consider the petition filed by the petitioner under Section 55 of the Act, examining as to whether the notification sought to be relied upon is applicable to the case of the petitioner and whether there is any error apparent on the face of the record. The scope of powers under Section 55 of the TNGST Act is not to review an order passed by it and the requirement being that the error should be apparent on the face of the record to be rectified. The writ petitions are allowed and the impugned orders are set aside and the matters are remanded back to the respondent for fresh consideration, who shall consider the petitioner s application for rectification - petition allowed by way of remand.

Issues:
Challenge to assessment orders under Central Sales Tax Act, 1956 and Tamil Nadu General Sales Tax Act, 1959 for the years 1998-99, 1999-00. Rectification petition filed under Section 55 of the TNGST Act. Arbitrary rejection of rectification petition. Violation of Article 14 of the Constitution of India.

Analysis:
The petitioner challenged assessment orders passed by the respondent under the Central Sales Tax Act, 1956, and Tamil Nadu General Sales Tax Act, 1959 for the years 1998-99, 1999-00. Initially, the petitioner filed writ petitions challenging the assessment proceedings, and a conditional order of stay was granted, directing the petitioner to pay tax at a specified rate. Subsequently, the petitioner filed writ appeals against the interim order and also submitted a rectification petition contending that the rate of tax adopted in the assessment orders was erroneous as certain notifications were not considered. The Hon'ble First Bench disposed of the writ appeals and petitions, directing the rectification petition to be decided by the authority concerned within a specified time frame. Recovery proceedings were stayed pending the rectification petition's disposal.

The assessing officer was required to consider the petitioner's petition under Section 55 of the Act to determine the applicability of the notification and whether there was an error apparent on the face of the record. The scope of powers under Section 55 was not to review an order but to rectify errors that were evident. However, the respondent rejected the rectification petition in a single line, stating no error was apparent on the face of the record, despite the specific directive from the Hon'ble First Bench to decide the petition. This arbitrary rejection without providing reasons was deemed erroneous, irrational, and a violation of Article 14 of the Constitution of India.

Due to the respondent's improper handling of the rectification petition, the court found sufficient grounds to interfere with the impugned orders. The writ petitions were allowed, the impugned orders were set aside, and the matters were remanded back to the respondent for fresh consideration. The respondent was directed to consider the petitioner's rectification application, provide an opportunity for a personal hearing, and pass orders on merits and in accordance with the law. No costs were awarded, and the connected miscellaneous petitions were closed. An interim stay order granted earlier was made absolute, with the condition that any payments made by the petitioner would abide by the orders to be passed by the respondent.

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