2015 (12) TMI 1338 - HC - VAT and Sales Tax

Rectification of mistake - Opportunity of hearing - Section 84 of TNVAT - Held that - Admittedly, as against the assessment order, a writ petition was filed before this Court, which was disposed of in favour of the Revenue. As against the said order, a Special Leave Petition was filed and the same is pending. In the meantime, pointing out certain errors apparent on the face of the record, the petitioner moved an application under Section 84 of the Act. Without passing any order on merits, the same was rejected by the impugned order. Section 84 of the TNVAT Act empowers the authority to rectify any error apparent on the face of the record. Sub-Section (4) of Section 84 provides exercise of powers under Sub-section (1) by the assessing authorities even though the original order of assessment, if any, passed in the matter has been the subject matter of an appeal or revision. - an opportunity should be given before rejecting the application filed under Section 84 of the Act. As far as the present case is concerned, the same is not provided. When such being the case, there is no justifiable reason for the assessing authority to reject the application filed under Section 84 of the Act - impugned order passed by the respondent dated 09.10.2015 is set aside and the matter is remitted back to the respondent - Decided in favour of assessee.

Summary

Issues:
Challenge to order of respondent dated 09.10.2015 under Section 84 of TNVAT Act.
Application of incentive schemes to customers in taxable net.
Rejection of Section 84 application by respondent.
Interpretation of Section 84 of TNVAT Act and powers of assessing authorities.

Analysis:
The petitioner, a dealer in tyres, challenged the respondent's order dated 09.10.2015 under Section 84 of the TNVAT Act. The petitioner reported turnover for the assessment year 2009-10, and after pointing out errors in the assessment order, filed an application under Section 84 on 07.10.2015. The petitioner contended that rectification would reduce the tax burden. Previous legal challenges by the petitioner regarding legislative competence and assessment proceedings were mentioned. Despite pending SLP, the respondent rejected the petitioner's Section 84 application, which the petitioner deemed arbitrary and illegal.

The petitioner argued that incentives to customers should not be included in taxable net, and the rejection of the Section 84 application was unjust. The respondent, represented by the Additional Government Pleader, stated that since there was no apparent error, the application was rightly rejected. The court noted the authority under Section 84 to rectify errors and the provision allowing such actions even if the assessment order is under appeal or revision.

The court referred to Section 84 of the TNVAT Act, emphasizing the authority's power to rectify errors and the need to provide an opportunity before rejecting applications under this section. As the petitioner was not given this opportunity, the court set aside the respondent's order and remitted the matter back for proper consideration within six weeks. The court directed the respondent to pass appropriate orders after affording due opportunity to the petitioner, in accordance with Section 84 of the Act. The writ petition was disposed of with no costs, and connected miscellaneous petitions were closed.