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2018 (1) TMI 1196 - HC - VAT and Sales TaxEffect and clarification given by the Advance Ruling Authority - rate of tax - Held that - the effect and clarification given by the Advance Ruling Authority was considered by this Court in assessee s own case M/s. All India Marathon Sports Versus The Assistant Commercial Tax Officer 2017 (8) TMI 625 - MADRAS HIGH COURT in which the petitioner challenged the pre-assessment notices for the assessment years 2009-10 and 2010-11 as being barred by limitation as prescribed under the PVAT Act - the only irresistible conclusion to be arrived at is that the order passed by the Appellate Assistant Commissioner in dismissing the petitioner s appeal without considering the matter on merits is incorrect and not legally sustainable. This is sufficient to set aside the impugned order - petition allowed by way of remand.
Issues:
1. Challenge against common order passed by the Appellate Assistant Commissioner under PVAT Act and CST Act for the years 2011-12 and 2012-13. 2. Effect of clarification by Advance Ruling Authority on the rate of tax on sports goods and Treadmill. 3. Interpretation of Section 77(3) of PVAT Act regarding pending applications and authority of Assessing Officer. Analysis: 1. The petitioner challenged the common order passed by the Appellate Assistant Commissioner under the PVAT Act and CST Act for the years 2011-12 and 2012-13. The petitioner raised contentions regarding the rate of tax on sports goods and Treadmill. The Appellate Assistant Commissioner, in paragraph 14 and 15 of the order, relied on the Advance Ruling Authority's clarification that Treadmill is taxable at 12.5% till a certain date and 14.5% thereafter under the CST Act. The petitioner contended that the order dismissing the appeal without considering the merits was incorrect and legally unsustainable. 2. The legal issue revolved around the effect of the Advance Ruling Authority's clarification on the tax rate. The court referred to previous judgments to determine the impact of such clarifications. It was noted that while the clarification binds the parties seeking it, the assessing authority is not bound by it and must make an independent decision based on evidence presented. The court emphasized that the final decision rests with the assessing or the Appellate Assistant Commissioner, and the clarification is not binding on them. The interpretation of Section 77(3) of the PVAT Act was crucial in this context. 3. The interpretation of Section 77(3) of the PVAT Act was a significant aspect of the judgment. The court analyzed the terms "an application" and "an applicant" in this section. It was concluded that these terms refer only to the assessee or dealer who approached the authority under this section. Any other interpretation would expand the scope of the section and conflict with other provisions of the Act. The court highlighted that accepting a broader interpretation would undermine the finality of assessment orders and render certain provisions redundant. In conclusion, the High Court allowed the Writ Petitions, setting aside the impugned order and remanding the matter to the first respondent for fresh consideration. The petitioner was directed to pay a specified sum for each assessment within a given period, and the bank account attachment was to be lifted. No coercive action was to be taken against the petitioner until the appeals were disposed of.
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