2022 (9) TMI 847 - HC - VAT and Sales Tax

Validity of assessment order - principal objection is that the VATO could not have re-assessed the income for the 1st Quarter of 2015-16 via the order dated 05.10.2018, in view of Rule 36B(7) of the DVAT Rules, 2005, since an objection qua the same period was pending before the OHA - Section 9(2) of the Central Sales Tax Act, 1956 read with Section 32 of the DVAT Act, 2004 - HELD THAT - Once an assessment has taken place under the CST Act, it is almost axiomatic that the respondent/revenue has taken a position concerning the transactions in issue i.e., that they are inter-state sale transactions. Consequently, the concerned officer s jurisdiction to impose tax qua such transactions under DVAT Act stood ousted by virtue of Section 7 of the very same Act. The impugned orders cannot be sustained. The same are, accordingly, quashed - Appeal dismissed.

Summary

Issues:
Challenge against orders dated 05.10.2018 revisiting assessment under Central Sales Tax Act, 1956 for the 4th Quarter of 2014-15 and 1st Quarter of 2015-16. Jurisdiction to re-assess income for 1st Quarter of 2015-16 in light of pending objections before Objection Hearing Authority (OHA). Interpretation of Rule 36B(7) of the DVAT Rules, 2005. Authority to revisit proceedings under CST Act. Application of Section 7 of the DVAT Act barring reassessment under local Act post assessment under CST Act.

Analysis:

The writ petitions challenged orders revisiting assessments under the Central Sales Tax Act, 1956 for specific quarters. The petitioner argued that the earlier assessments under the DVAT Act for the same periods had remained undisturbed. The petitioner contended that the VATO had no jurisdiction to re-assess the income for the 1st Quarter of 2015-16 while objections were pending before the OHA, citing Rule 36B(7) of the DVAT Rules, 2005. The respondent/revenue justified the re-assessment due to canceled C-Forms but acknowledged that the CST Act assessments had not been disturbed. The respondent did not utilize the revision power under Section 74A of the DVAT Act. The petitioner relied on Section 7 of the DVAT Act, supported by a previous judgment, to argue against reassessment post CST Act assessment. The court agreed, noting that once an assessment occurred under the CST Act, the jurisdiction to impose tax under the DVAT Act was ousted as per Section 7 of the DVAT Act.

The court found that the impugned orders revisiting the assessments under the CST Act could not be sustained and quashed them, dismissing the appeal accordingly. The case papers were directed to be consigned to record, concluding the judgment.