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2013 (3) TMI 296 - HC - VAT and Sales TaxRevision of Assessment order - Tamilnadu General Sales Tax Act, 1959 - as per the assessee when Watery Coconuts have been declared as a commodity exempted from the levy of sales tax, it is not open to the respondent to levy such tax in an indirect manner - as per the department period of limitation would not apply to the present case - Held that - It is not in dispute that the impugned notice issued by the respondent and the consequential order passed thereon are beyond the period of five years from the date of the initial assessment order. While so, it would not be open to the respondent to claim that the petitioner is not entitled to raise the plea of limitation when the matter had been remitted back by this Court, by its order, dated 30.1.2012. It cannot be claimed that the period of limitation would not apply in respect of cases where an order had been passed remitting the matter back to the authority concerned for considering it afresh. In fact, the orders passed by the respondent, on 3.9.2009, had been set aside by this Court, by its order, dated 30.1.2012, as such orders could not be sustained in the eye of law. Even though this Court had remitted the matter back to the respondent after setting aside the impugned orders, dated 3.9.2009, mainly on the ground that no notice had been issued to the petitioner before passing the said order, the issue relating to limitation had been left open to be raised, by the petitioner, at the appropriate stage. In such circumstances, it is not open to the respondent to claim that the period of limitation would not apply to the present case. As such, it is clear that the impugned notice, dated 20.3.2012, and the consequential order passid by the respondent on 30.5.2012, are liable to be set aside and therefore, they are set aside. Accordingly, the writ petition stands allowed.
Issues:
1. Revision of assessment order under Section 16 of the Tamilnadu General Sales Tax Act, 1959. 2. Rectification of a mistake under Section 55 of the Tamilnadu General Sales Tax Act, 1959. 3. Jurisdiction of the respondent to levy tax on exempted commodity. 4. Authority to issue orders beyond the period of limitation. Revision of Assessment Order under Section 16: The petitioner, a registered dealer, reported a total and taxable turnover for the assessment year 2003-2004. The respondent initially accepted the turnover but later revised it to a significantly higher amount, demanding additional tax. The petitioner contested this revision, highlighting that it was done without issuing a proper notice under Section 16 of the Act, which is required for revising assessment orders. The court found that the respondent failed to follow the necessary procedures for revision, leading to the conclusion that the revision order lacked a legal basis. Rectification of a Mistake under Section 55: The respondent issued orders under Section 55 of the Act, purportedly to rectify mistakes in the assessment. However, the court noted that these orders were arbitrary and illegal as they were not supported by the authority of law. The respondent's attempt to levy tax on an exempted commodity, Watery Coconuts, was deemed unjustified as the commodity was declared tax-exempt by the Commissioner of Commercial Taxes. The court emphasized that rectification under Section 55 can only be made if there is an error apparent on the face of the record, which was not the case here. Jurisdiction to Levy Tax on Exempted Commodity: The respondent's decision to levy tax on Watery Coconuts, an exempted commodity, was challenged by the petitioner. The court agreed with the petitioner, stating that the respondent lacked the authority to impose tax on a product that was explicitly exempted from tax liability. The court highlighted that the exemption of Watery Coconuts from tax had been clarified by the Commissioner of Commercial Taxes, further strengthening the petitioner's argument against the tax imposition. Authority to Issue Orders Beyond the Period of Limitation: The court addressed the issue of the respondent issuing orders beyond the prescribed limitation period. Despite the respondent's attempt to justify the timing of the orders based on previous actions, the court ruled that the impugned notice and consequential order were indeed beyond the five-year limitation period from the initial assessment order. The court emphasized that the period of limitation cannot be disregarded, even in cases where the matter is remitted back for reconsideration. Ultimately, the court set aside the impugned notice and order, emphasizing the importance of adhering to legal timelines. In conclusion, the High Court of Madras found in favor of the petitioner, setting aside the impugned notice and order issued by the respondent. The court emphasized the importance of following legal procedures, including issuing proper notices and respecting the prescribed limitation period for taking actions related to tax assessments. The judgment underscored the necessity for authorities to act within the bounds of the law and upheld the petitioner's objections regarding jurisdiction, tax imposition on exempted commodities, and adherence to legal timelines.
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