2016 (3) TMI 1031 - HC - VAT and Sales Tax

Allowability of concessional rate of tax relating to the assessment year 1988-89 - As per Contract appellant engaged in designing, manufacturing, supplying and commissioning and for handing over of eight numbers of Yard Tractors with drive clutch unit and though the vehicle was named as tractor, there was nothing but a cabin built for the driver on the trailer/lorry chassis.- As per G.O.P.No.227, dated 3.3.1984, concessional rate of tax has been provided on the sale of lorry chassis - Held that - the impugned order passed by the Tamil Nadu Sales Tax Appellate Tribunal (Main Bench), Chennai, is set aside and the matter is remitted back to the Tribunal to decide the matter, afresh, based on the evidence placed before it and to render a finding as to whether the vehicle in question is eligible for the concessional rate of tax, as held in the case of similar vehicles, during the assessment year 1989-90, after giving an opportunity of personal hearing to the assessee and the Department. - Matter remitted back

Summary

Issues:
Challenge to order of Sales Tax Appellate Tribunal regarding concessional tax rate on vehicle cabin construction.

Analysis:
The case involved a revision challenging the Sales Tax Appellate Tribunal's order regarding the concessional tax rate on the construction of vehicle cabins. The petitioner, a public limited company engaged in manufacturing motor vehicle chassis, had been awarded a contract to design and supply Yard Tractors with drive clutch units. The petitioner claimed a concessional tax rate under G.O.P.No.227, dated 3.3.1984, which was disallowed in the assessment. The petitioner argued that the Sales Tax Appellate Tribunal erred in confirming a higher tax rate on the cabin construction, contending that it should be assessed at a lower rate of 6% as it was not a fully built motor vehicle. The petitioner also challenged the Tribunal's reliance on previous judgments related to vehicle body construction on chassis, arguing that those cases were not applicable to the present situation.

The petitioner further contended that the Tribunal failed to consider the evidence properly and arrived at a perverse finding that the vehicle was not eligible for the concessional tax rate. The High Court set aside the Tribunal's order and remitted the matter back for fresh consideration based on the evidence presented. The Court directed the Tribunal to determine whether the vehicle in question was eligible for the concessional tax rate, similar to other vehicles during the assessment year 1989-90. The Tribunal was instructed to provide a personal hearing to both the assessee and the Department and to pass appropriate orders expeditiously and in accordance with the law.

In conclusion, the Tax Case Revision was disposed of with the above directions, emphasizing a reassessment of the concessional tax rate eligibility for the vehicle cabin construction based on the evidence presented and legal considerations, ensuring a fair opportunity for all parties involved in the proceedings.