2017 (10) TMI 832 - HC - VAT and Sales Tax

Issuance of Writ of prohibition - Revision of assessment - TNGST Act - It is the case of the petitioner that the exercise of option under Section 7(C) of the Act is at the discretion of the assessee and the Assessing Officer does not have any jurisdiction or power to refuse such an option exercised by the assessee and more so, when the assessment has already become final - Held that - Admittedly, the respondent has power and jurisdiction to issue notice to revise a completed assessment. Therefore, it cannot be stated that the impugned notice is without jurisdiction. The point that the petitioner seeks to canvass is on the ground that the Assessing Officer has no discretion, but to accept the option exercised by the dealer under Section 7 (C) of the Act. Apart from other contentions these aspects involves adjudication into facts. Equally, the issue relating to works contract is also a factual matter. Thus, the petitioner has to necessarily submit themselves to the jurisdiction of the respondent and file their objections to the notice dated 11.04.2005 - while declining to grant the prayer sought for, liberty is granted to the petitioner to submit their objections to the notice dated 11.04.2005 - petition dismissed.

Summary

Issues:
1. Writ petition seeking prohibition of respondent from revising assessment under TNGST Act for Assessment year 2002-03.
2. Discretion of assessee under Section 7(C) of the Act and Assessing Officer's power to refuse such option.
3. Taxability of works contract turnover under State Commercial Tax Laws or Central Sales Tax Act.

Analysis:
1. The petitioner filed returns for the relevant year claiming exemption for second and subsequent sales of Generator spares and labour charges. The Assessing Officer verified the purchase bills and allowed the exemption. The turnover reported by the petitioner agreed with the turnover in books, and the assessment order was passed on 31.12.2004. However, a notice dated 11.04.2005 proposed to tax first sale of Genset at 16% and disputed the tax rate for works contracts. The petitioner sought prohibition of further proceedings based on this notice.

2. The petitioner argued that the Assessing Officer cannot refuse the option exercised under Section 7(C) of the Act, especially when the assessment is final. It was contended that the Assessing Officer's discretion is limited, and the option under Section 7(C) supersedes Section 3B. The petitioner emphasized that the works contract turnover is interstate and should be assessed under the Central Sales Tax Act, not the State Commercial Tax Laws.

3. The court observed that the respondent had the jurisdiction to issue the notice for revising the assessment. While the petitioner's contentions involved factual adjudication on the Assessing Officer's discretion and the nature of works contract turnover, the court directed the petitioner to submit objections to the notice within 30 days. The court granted liberty to the petitioner to present objections, following which the respondent would consider them and complete the assessment in accordance with the law. The writ petition was disposed of with no costs awarded.