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2018 (1) TMI 92 - HC - VAT and Sales TaxSales effected to exporters in the auction center - exemption u/s 5(3) of the CST Act, 1956 - rejection on the ground that they have not complied with G.O.Ms.876 dated 29.07.1982 - Held that - Identical issue decided in the case of M/s. The United Nilgiri Tea Estates Co. Ltd., M/s. Stanes Amalgamated Versus The Commercial Tax Officer (FAC), The State of Tamil Nadu 2017 (12) TMI 689 - MADRAS HIGH COURT , where it was held that the production of certificates as per the notification dated 29.07.1982, would be required only in cases where the tea brokers are not registered - The petitioner is a registered dealer on the file of the first respondent and also on the file of the Commercial Tax Officer, Coonoor. M/s.Tea Serve issued certificates to the petitioner as to the nature of sale effected and payment of tax made to the sales tax authorities. The matter is remanded to the first respondent for redoing the assessment in accordance with law - petition allowed by way of remand.
Issues:
1. Exemption under Section 5(3) of the CST Act, 1956 for sales to exporters. 2. Compliance with G.O.Ms.876 dated 29.07.1982 for exemption. 3. Justification of re-opening assessment for non-compliance with G.O.Ms.876. 4. Verification of Form H declaration and export documents. 5. Impact of registration of tea brokers under TNGST Act/CST Act on exemption. Analysis: 1. The petitioner, an Industrial Co-operative Society affiliated with M/s.Tea Serve, sought exemption under Section 5(3) of the CST Act, 1956 for sales to exporters. The issue arose when the first respondent rejected the exemption claim, citing non-compliance with G.O.Ms.876 dated 29.07.1982. 2. The High Court referred to a previous judgment involving a similar issue in the case of M/s.The United Nilgiri Tea Estates Co. Ltd., where it was established that for tea sales at public auctions for export, certain conditions needed to be met for exemption under Section 5(3) of the CST Act. The Court highlighted the importance of fulfilling obligations such as providing a copy of the foreign order and ensuring the exported goods match the local customer's order. 3. The Court examined whether the first respondent was justified in proposing to re-open the assessment due to the petitioner's alleged non-compliance with G.O.Ms.876. It was noted that the Form H declaration, equivalent to the prescribed form under the CST Act, was provided to the auctioneers, who acted as brokers. The Court emphasized that the first respondent had already verified the Form H declaration and granted exemption based on the export documents. 4. The judgment emphasized the significance of communication between tea brokers and the Commercial Tax Officer after obtaining registration under the TNGST Act/CST Act. The Court highlighted that the assessments were completed based on certificates from registered tea brokers, confirming tax payments and submission of required documents for exemption. It was noted that re-opening assessments based on non-compliance would undermine the exemption benefits intended to support the tea industry. 5. Additionally, the Court pointed out an error in issuing a notice for the assessment year 2000-01 despite the production of Form H declaration. The judgment concluded that the reasons for re-opening assessments were not justified, aligning with the decision in the M/s.The United Nilgiri Tea Estates Co. Ltd. case. Consequently, the writ petition was allowed, the impugned order was quashed, and the matter was remanded for reassessment in compliance with the law. This detailed analysis of the judgment highlights the legal intricacies surrounding the exemption claim, compliance requirements, and the Court's assessment of the first respondent's actions in re-opening the assessment.
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