2013 (6) TMI 138 - HC - VAT and Sales Tax

Rectification of mistake - rate of tax adopted by the respondent-authority is inconsistent with the rate specified in the First Schedule to the TNVAT Act - department grouped the entire list of commodities under the nomenclature Petroleum Products and accordingly assessed the turnover to tax at 30% in the assessment order which is applicable for sale of petrol and not for other petroleum products like Bitumen, Carbon Black Feed Stock (CBFS), CRMB, Hexane, Slack Wax, Wax etc - Held that - Considering the clarifications issued by the Head of Department of the respondent in respect of the applicability of rate of tax for Bitumen, Carbon Black Feed Stock (CBFS), CRMB, Hexane, all kinds of Wax, scrap and waste, etc. and particularly, when the petitioner agreed for the assessment of CBFS-LE at 12.5% as an unclassified item under Part-C of First Schedule to the TNVAT Act, the petitioner sent a letter dated 16.4.2012 to the respondent, which was followed by various reminders, last of which is dated 1.4.2013, seeking rectification of the error under Section 84 of the TNVAT Act. Thus as the petitioner has raised a grievance in their letter dated 1.4.2013, addressed to the Joint Commissioner (CT), Large Tax Payers Unit, Chennai, stating that there is error in the impugned order, dated 4.7.2012 passed by the respondent-Deputy Commissioner (CT)-III, Large Tax Payers Unit, Chennai, this Writ Petition is disposed of, with a direction to the respondent to consider the petitioner s grievance in their letter dated 1.4.2013, give an opportunity of hearing and pass appropriate orders on merits.

Summary

Issues:
Challenge to order passed by respondent in CST.690404/2007-08 for quashing as arbitrary and illegal, seeking rectification and consideration of representation.

Analysis:

Issue 1: Challenge to Order
The petitioner, a petroleum products manufacturer, challenged the order passed by the respondent in CST.690404/2007-08, dated 4.7.2012, seeking to quash it as arbitrary and illegal. The petitioner contended that errors were apparent on the face of the assessment order, particularly regarding the assessment of inter-State sales turnover of petroleum products. The respondent had grouped various products under the nomenclature "Petroleum Products" and assessed the turnover at a flat rate of 30%, which was incorrect. The petitioner argued that different products should have been assessed individually at their respective rates as per the TNVAT Act. The petitioner sought rectification under Section 84 of the TNVAT Act read with Section 9(2) of the CST Act.

Issue 2: Rectification Request
The petitioner filed representations pointing out errors in the assessment order and requesting rectification. Despite the petitioner's efforts, the respondent issued a revised order on 29.6.2012, accepting some declarations but failing to correct the grouping error. Subsequently, on 4.7.2012, another revised order was issued rectifying an arithmetic error but not addressing the grouping issue. The petitioner continued to highlight the errors through letters and reminders to the respondent and the Joint Commissioner (CT) but did not receive a satisfactory response.

Judgment:
The High Court disposed of the Writ Petition, directing the respondent to consider the petitioner's grievance as stated in their letter dated 1.4.2013. The Court emphasized that the respondent should give the petitioner an opportunity of hearing and pass appropriate orders within four weeks from the date of receipt of the order. The judgment focused on the need for the respondent to address the errors in the assessment order and rectify them in accordance with the law.