9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (3) TMI 959 - HC - VAT and Sales TaxValidity of SCN - Revision of assessment - Section 16(2) of the TNGST Act, 1959 - SCN challenged primarily on the ground that the Show Cause Notice is contrary to Section 4(2) of the CST Act, 1956 and the definition of sale under Section 2(n) of the TNGST Act, 1959 read with explanation 3(a)(i) of the TNGST Act, 1959 as it stood during the material period - HELD THAT - The revision notice extracts the content of the petitioner's reply dated 13.05.2005, and has assumed the facts given in the representation of the petitioner in reply dated 13.05.2005 to be correct and has yet proposed to revise the assessment on the ground that the invoices was raised at Chennai and that movement of the ship to South Korea and Dubai ports were in the course of their voyage and movements of the ships were not as a resulted of contract of export between the foreign buyer and the dealer and that there is neither foreign destination nor foreign seller or other state purchaser or seller. The impugned revision notice is beyond the scope of limitation under Article 286(2) of the Constitution of India read with Section 4(2) of the CST Act, 1956 and the definition of sale in Section 2(n) read with explanation 3(a) (i) of the TNGST Act, 1959. The impugned revision notice therefore has to go. However, this would without prejudice to the rights of the respondent to articulate a fresh notice to the 2nd petitioner who has taken over the 1st petitioner in accordance with the provisions of the TNGST Act, 1959 after factoring Section 4(2) CST Act, 1956 and Article 286(2) of the Constitution of India. Therefore, the respondent may either issue a fresh notice or a corrigendum to the impugned notice to the 2nd petitioner. The case remitted back to the respondent to issue a fresh notice or a corrigendum to the impugned notice within a period of 60 days from the date of receipt of a copy of this order clearly specifying as to the basis on which it propose to revise the order of assessment completed on 31.03.2005 - petition allowed by way of remand.
Issues:
Challenging revision notice under Section 16(2) of TNGST Act, 1959 for Assessment Year 2000-2001 based on Show Cause Notice. Interpretation of sale transactions of ships between dealers in Mumbai and Chennai. Contradiction between Accountant General's report and clarification by Principal Commissioner of Commercial Taxes. Jurisdiction of assessment based on location of sale and delivery of ships. Legality of proposed revision notice under TNGST Act, 1959 and CST Act, 1956. Analysis: 1. Challenging Revision Notice: The 1st petitioner contested the revision notice issued under Section 16(2) of the TNGST Act, 1959 for the Assessment Year 2000-2001. The petitioner raised objections primarily on the grounds that the notice contradicted Section 4(2) of the CST Act, 1956 and the definition of "sale" under Section 2(n) of the TNGST Act, 1959. The petitioner argued that the notice was based on an objection prepared by the Accountant General, which was contrary to the details provided by the petitioner in response to a previous notice. 2. Interpretation of Sale Transactions: The dispute revolved around the sale transactions of ships between dealers in Mumbai and Chennai. The petitioner argued that the delivery of the ships took place in South Korea and Dubai, not in Chennai. This raised questions about the jurisdiction of the assessment, as the commercial invoices were raised in Chennai but the physical delivery occurred outside the state. The petitioner cited a clarification by the Principal Commissioner of Commercial Taxes, emphasizing that if the delivery of the ship takes place in a foreign country, the sale falls outside the purview of the TNGST Act. 3. Contradiction in Reports: The petitioner highlighted a contradiction between the Accountant General's report and the clarification by the Principal Commissioner of Commercial Taxes. The petitioner contended that the impugned notice was issued based on a wrong assumption of the law, as clarified in the communication dated 29.03.2000. The petitioner argued that the sale did not satisfy the requirements of the CST Act, 1956 and the definition of "sale" under the TNGST Act, 1959. 4. Jurisdiction of Assessment: The respondent argued that the situs of sale was Chennai, despite the physical delivery of ships outside India. The respondent maintained that since the invoices were raised in Chennai, and the ownership and maintenance were managed by the Chennai-based company, the provisions of the law applied to the transactions. The respondent emphasized that the movement of ships to foreign ports during their voyage did not alter the jurisdiction of the assessment. 5. Legality of Revision Notice: After reviewing the impugned notice, the original assessment order, and relevant clarifications, the Court concluded that the revision notice exceeded the scope of limitation under the CST Act, 1956 and the TNGST Act, 1959. The Court remitted the case back to the respondent to issue a fresh notice or a corrigendum within 60 days, specifying the basis for revising the assessment order. The Court directed the respondent to consider the case in accordance with the law within six months, ensuring the rights of the concerned parties to be heard. In conclusion, the Court disposed of the Writ Petition without costs, instructing the respondent to reevaluate the assessment based on the clarified legal provisions and factual circumstances surrounding the sale transactions of ships, ensuring a fair and lawful resolution within the specified timeline.
|
