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2019 (2) TMI 1160 - HC - VAT and Sales TaxReopening of assessment - change of opinion - Classification of cotton coated fabrics - TNGST Act - whether the assessment for the year 2000-01 under the provisions of the TNGST Act, dated 21.03.2002, could have been reopened? - Held that - There was no valid ground to reopen the assessment. In fact, reading of the order shows that the Assessing Officer himself is not clear as to on what reason, he reopened the assessment. Therefore, we can safely conclude that the reopening of the assessment was a clear case of change of opinion. For the earlier assessment years and the subsequent assessment years, viz., 1999-2000, 2001-02 and 2002-03, exemption has been granted in respect of the same type of transaction as is being done by the assessee. Thus, the Tribunal erroneously reversed the order passed by the first appellate authority, dated 08.04.2004. Tax case revision is allowed.
Issues:
1. Validity of reopening assessment under TNGST Act for the year 2000-01. 2. Classification of "cotton coated fabrics" under TNGST Act. 3. Consideration of Additional excise duty for goods under tariff Entry "59.03". 4. Relevance of department's classification for earlier and subsequent years. Issue 1: Validity of Reopening Assessment: The case involved a revision filed under section 38 of the Tamil Nadu General Sales Tax Act, 1958 against the order of the Tamil Nadu Sales Tax Appellate Tribunal for the assessment year 2000-01. The Assessing Officer had initially allowed exemption on the turnover for sales of PVC plastic sheets and cotton coated fabrics. However, the assessment was later reopened without valid grounds, leading to the cancellation of the exemption. The High Court found that the reopening of the assessment was based on a change of opinion, as there was no valid reason provided for the reassessment. The court concluded that the reassessment was unjustified and upheld the exemption granted in the original assessment order. Issue 2: Classification of "Cotton Coated Fabrics": The dispute also centered around the classification of "cotton coated fabrics" for taxation purposes under the TNGST Act. The Assessing Officer had initially exempted these sales from tax, but later sought to disallow the exemption. The first appellate authority upheld the exemption, citing valid reasons based on the purchase bills. However, the Tribunal reversed this decision based on the products listed on the assessee's letterhead. The High Court found the Tribunal's reasoning flawed and noted that similar exemptions had been granted for the same type of transactions in earlier and subsequent assessment years. Consequently, the court set aside the Tribunal's order, restoring the exemption granted by the first appellate authority. Issue 3: Consideration of Additional Excise Duty: One of the questions raised was whether the non-payment of Additional excise duty was essential for goods falling under tariff Entry "59.03" of the Central Excise Tariff, 1944. The court did not delve deeply into this issue in the judgment, as the primary focus was on the validity of the reassessment and the classification of goods under the TNGST Act. Issue 4: Department's Classification for Earlier and Subsequent Years: The High Court highlighted that for the assessment years preceding and following 2000-01, exemptions had been granted for similar transactions conducted by the assessee. This fact was crucial in determining the correctness of the reassessment and the classification of goods. The court emphasized that the Tribunal erred in reversing the first appellate authority's decision based on the department's consistent classification in earlier and subsequent years. As a result, the court allowed the tax case revision, set aside the Tribunal's order, and restored the decision of the first appellate authority in favor of the petitioner/assessee.
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