2021 (2) TMI 907 - HC - VAT and Sales Tax

Rectification of mistake - compounding scheme under Section 7-C of the Tamil Nadu General Sales Tax Act, 1959 - According to the authority, the act of the petitioner fell foul of 7-C of the Tamil Nadu General Sales Tax Act, 1959 - HELD THAT - Section 55(3-A) of TNGST Act categorically states that the power of rectification can be exercised by the assessing authority even though the original order of assessment was subject matter of an appeal or revision. It is true that the appeal filed by the petitioner was dismissed and the same was also confirmed. It appears that the order passed by the appellate authority dismissing the rectification petition was also confirmed - That again will not come in the way of Section 55(3-A) of the Act from having its statutory effect. Notwithstanding any of the adverse orders, which the petitioner suffered, the original assessing authority can still exercise the power of rectification, since such a jurisdiction has been specifically conferred under the aforesaid provision. In the case on hand, the assessing authority has declined to exercise her jurisdiction by citing the earlier orders. This in my view amounts to abdication of the statutory jurisdiction vested in her. In this view of the matter, the order impugned in the writ petition is set aside and the matter is remitted to the file of the second respondent to pass orders afresh in accordance with law - Petition allowed by way of remand.

Summary

Issues: Rectification petition under Section 55 of the Tamil Nadu General Sales Tax Act, 1959

Analysis:
The writ petitioner, a dealer registered with the respondents, was awarded a contract by TWAD Board in 2000-2001. The petitioner claimed to have reached taxable turnover only in February 2002 and opted for the compounding scheme under Section 7-C of the Tamil Nadu General Sales Tax Act, 1959. However, the authority levied tax under regular provisions, leading to legal disputes. The petitioner filed nil returns for April 2001 to January 2002, and subsequent appeals were unsuccessful, including a rectification petition under Section 55 of the Act, which was rejected by the assessing authority, prompting the writ petition.

The key contention was whether the assessing authority could rectify errors despite adverse orders against the petitioner. Section 55(3-A) of the Act allows rectification even if the original assessment order was appealed or revised. The court noted that the assessing authority's failure to exercise jurisdiction due to prior adverse orders amounted to an abdication of statutory duty. Consequently, the impugned order was set aside, and the matter was remitted for fresh consideration by the assessing authority, with the directive to provide the petitioner with a hearing opportunity to point out any errors in the original order.

In conclusion, the writ petition was allowed without costs, and the connected miscellaneous petition was closed. The judgment emphasized the statutory provision's importance in allowing rectification despite previous adverse decisions and upheld the petitioner's right to challenge errors in the assessment order.