2018 (3) TMI 1272 - HC - VAT and Sales Tax

Incentive schemes for setting up new and expansion of such industries - interim stay of assessment order - Held that - Before the writ Court, appellant has not filed counter affidavit. Before us, respondent has brought fresh facts and supporting documents. Parties are at liberty to raise appropriate pleadings before the writ Court with supporting documents - Before the writ Court, the respondent had the benefit of interim stay of assessment order dated 27.08.2015. Inasmuch as the order made in W.P.No.30426 of 2015, is set aside, interim order made in MP No.1 of 2015 in W.P.No.30426 of 2015, stands restored. Appeal disposed off.

Summary

Issues involved:
Challenge to assessment order, application for rectification of assessment order, interpretation of Section 84 of the Tamil Nadu Value Added Tax Act, 2006, validity of application for withdrawal of notice of demand, consideration of economic subsidy in incentive schemes, setting aside of writ petition order, restoration of interim stay order, direction for disposal of the matter.

Analysis:

Challenge to Assessment Order:
The appellant challenged the order made in W.P.No.30426 of 2015 dated 14.02.2017, which was dismissed earlier. The respondent affirmed not taking any credit on raw materials purchased, leading to an erroneous assessment under Section 19(2)(v) of the Tamil Nadu Value Added Tax Act, 2006. The appellant sought rectification of the assessment order, which was acknowledged, and the issue was to be re-examined by the court.

Application for Rectification of Assessment Order:
The respondent submitted an application dated 21.09.2015 to withdraw the notice of demand, but it was contended that this application did not qualify as a rectification application under Section 84 of the Tamil Nadu Value Added Tax Act, 2006. The Act provides for rectification of errors apparent on the face of the record within a specified time frame, with due notice and opportunity to be heard.

Interpretation of Section 84 of the Act:
Section 84 of the Tamil Nadu Value Added Tax Act, 2006, empowers the assessing authority to rectify errors on the face of the record within a stipulated period. It outlines the procedure for rectification, including provisions for enhancing or reducing assessments or penalties, refund due to the dealer, and revised notices in case of enhancements.

Validity of Application for Withdrawal of Notice of Demand:
The application submitted by the respondent for withdrawing the notice of demand was contested as not meeting the criteria set forth in Section 84 of the Act. It was argued that no other statutory application had been made to the authority, emphasizing the importance of adhering to the prescribed procedures for rectification.

Consideration of Economic Subsidy in Incentive Schemes:
The respondent argued that the provision under Section 19(2)(v) as amended should not apply to incentive schemes for the establishment and expansion of industries, citing various government orders on granting economic subsidies instead of refunding input tax. This raised the question of the applicability of tax provisions to specific economic incentive programs.

Setting Aside of Writ Petition Order:
In light of the submissions and arguments presented, the order in W.P.No.30426 of 2015 dated 14.02.2017 was set aside, allowing for a re-examination of the issues by the court. The appellant had not filed a counter affidavit before the writ court, but fresh facts and documents were presented before the High Court for consideration.

Restoration of Interim Stay Order and Disposal of the Matter:
The interim stay order granted in MP No.1 of 2015 in W.P.No.30426 of 2015 was restored following the setting aside of the writ petition order. The High Court directed the writ court to dispose of the matter expeditiously, granting parties the liberty to raise appropriate pleadings with supporting documents for further consideration.

Conclusion:
The High Court's judgment addressed the challenges to the assessment order, the application for rectification, the interpretation of relevant tax provisions, and the consideration of economic subsidies in incentive schemes. By setting aside the writ petition order and restoring the interim stay, the court provided directions for the expeditious disposal of the matter, emphasizing adherence to statutory procedures and due process in tax assessments and rectifications.