2017 (11) TMI 1161 - HC - VAT and Sales Tax

Reopening of assessment - imposing higher rate of tax - whether reopening of assessments are justified, when assesment are complete and tax has been already paid - Held that - the issue involved in this writ petition is squarely covered by the decision of the Division Bench of this Court in the case of The Commissioner of Commercial Taxes, Chennai and another V. M/s.Sundek India Ltd. 2015 (9) TMI 45 - MADRAS HIGH COURT , where it was held that assessments in respect of respondent / assessee having been completed pursuant to order passed by Special Tribunal and tax at rate of 10% was also collected, Revenue was not justified in demanding tax at 16% by seeking to reopen concluded assessments by issuing clarification - the SCN is without jurisdiction - petition allowed - decided in favor of petitioner.

Summary

Issues Involved:
Challenge to show cause notice proposing reassessment of turnover under Central Sales Tax Act, 1956.

Analysis:
The petitioner challenged a show cause notice proposing to reassess the turnover at a higher tax rate of 16.8% for the year 2005-2006 under the Central Sales Tax Act, 1956. The counsel for the petitioner argued that the issue was similar to a previous case where the Division Bench dismissed the appeal by the Revenue, emphasizing the need for proper notice before changing tax rates. The court considered various legal precedents, including decisions related to interpretation of tax laws and the need for clarity in tax matters. It was highlighted that assessments had been completed based on a Special Tribunal order, and the Revenue's attempt to demand higher tax rates retrospectively was deemed unjustified. The court agreed with the earlier decision, stating that the Revenue had no grounds to interfere with the completed assessments and dismissed the appeal.

The Government Advocate representing the Revenue acknowledged the legal position but argued that the notice was merely a procedural step, allowing the petitioner to raise objections. However, the court disagreed with this stance, citing the Division Bench's ruling that similar notices were without jurisdiction. Therefore, the court ruled in favor of the petitioner, quashing the impugned proceedings based on the precedent set by the Division Bench. The petitioner was not required to file objections to the notice before challenging it, as per the court's decision. The judgment aligned with the earlier case involving Sundek India Limited, leading to the allowance of the Writ Petition and the closure of the connected miscellaneous petition.