2025 (2) TMI 2 - HC - VAT / Sales Tax

Revision of assessment - escaped turnover - specific case of the petitioner is that the petitioner was deemed to have been assessed in terms of Section 22(2) of TNVAT Act 2006 on 31.10.2014 - HELD THAT - A reading of the impugned order indicates that barring discussion on the limitation and a conclusion that there was a escaped turnover there is no clear discussion as to how the proposal contained in the revised notice dated 04.12.2020 was sustained. It is however made clear that equitable principles of estoppal will not apply on tax and equity are strangers like chalk and cheese. Therefore merely the first revised notice dated 28.11.2017 proposed a sum of Rs. 3, 15, 489/- ipso facto would not mean the respondent was precluded for issuing a revised notice dated 04.12.2020 proposing to revised escaped turnover of Rs. 17, 12, 472/-. The order has to clearly discuss the same. Therefore to balance the interest of the parties Court is inclined to set aside the impugned order and the remits the case back to re-do the adjudication on merits within a period of three months from the date of receipt of a copy of this order. Conclusion - The impugned order was deficient in addressing the merits and thus set it aside remitting the case for re-adjudication on the merits within three months. Petition disposed off.

Summary

The petitioner challenged an impugned order dated 10.03.2022 concerning the Assessment Year 2013-2014, arguing that the assessment was deemed completed on 31.10.2014 under Section 22(2) of the Tamil Nadu Value Added Tax (TNVAT) Act, 2006. The petitioner contended that a notice issued on 28.11.2017 proposed revising the taxable turnover by adding Rs. 3,15,489, but no follow-up order was passed. A revised notice on 04.12.2020 proposed a significantly higher addition of Rs. 17,12,472, which the petitioner opposed, arguing that such an increase was prejudicial and beyond the limitation period.

The Court considered the legal framework under the TNVAT Act, particularly Section 27, which governs the revision of assessments. The Court referenced the decision in M/s. Orient Fans v. The State Tax Officer, which clarified the limitation period for revising assessments, and another decision by a Division Bench in Appellate Assistant Commissioner (CT) v. Supreme Coaters and Fabricators, which similarly addressed limitation issues under the Pondicherry VAT Act.

The Court overruled the petitioner's objection regarding limitation, citing these precedents. However, it noted that the impugned order failed to address the petitioner's substantive objections on the merits of the case. The order merely acknowledged the petitioner's response without discussing how the revised proposal was justified. The Court emphasized that equitable principles like estoppel do not apply in tax matters, allowing for the issuance of revised notices.

The Court concluded that the impugned order was deficient in addressing the merits and thus set it aside, remitting the case for re-adjudication on the merits within three months. The limitation issue, however, was settled by the Court's earlier decisions and could not be contested further.