2017 (2) TMI 959 - HC - VAT and Sales Tax

Principles of natural justice - petitioner claim that none of the submissions, as set out in the sur-rejoinder dated 29.06.2015, were taken into consideration - judgments were cited in support of the submissions made, which were neither discussed nor referred to in the impugned orders passed by respondent No.2 concerning the relevant assessment years - Held that - A bare perusal of the impugned orders would show that the submission advanced on behalf of the petitioner with regard to the fact that the objections raised in the reply filed with respondent No.2, in particular, as reflected in sur-rejoinder dated 29.06.2015, have not been adverted to - Amongst the various objections taken in the sur-rejoinder, one of the more crucial objection appears to be with regard to limitation. There is no reference in the impugned orders qua the concerned assessment years with regard to the objection taken that the demand is barred by limitation. Appeal allowed by way of remand.

Summary

Issues Involved:
1. Tax on difference in sales turnover in books of accounts and monthly VAT returns
2. Tax computed on sale of goods at a price lesser than the cost of the goods
3. Tax on miscellaneous income
4. Tax on handling charges paid on transportation of goods
5. Disallowance of exemption of printed material on sale of brochures
6. Disallowance of exemption of aluminum domestic utensils on the sales of non-sticky fry pan and non-sticky tawa
7. Disallowance of exemption claimed on the sales of sauce pan
8. Disallowance of exemption claimed on the sales of floral set of 3T light

Detailed Analysis:

Issue 1: Tax on difference in sales turnover in books of accounts and monthly VAT returns
The petitioner did not contest this issue before the court, indicating a willingness to prefer statutory appeals for this matter.

Issue 2: Tax computed on sale of goods at a price lesser than the cost of the goods
The petitioner argued that there was a breach of natural justice concerning this issue. The show cause notice was issued on 12.11.2014, and a reply was filed on 27.11.2014. A rejoinder from the respondent was issued on 16.6.2015, followed by a sur-rejoinder from the petitioner on 29.06.2015 and an additional submission on 30.06.2015. The petitioner raised several objections, including the applicability of Section 24 of the Tamil Nadu Value Added Tax Act, 2006, the guidelines in Rule 8(3) of the Tamil Nadu Value Added Tax Rules, 2007, the onus on the Assessing Officer, the vagueness of the notice, the actual consideration payable, and the limitation period. The court found that the impugned orders did not address these objections, particularly the limitation issue, and thus concluded that there was a breach of natural justice. The court set aside the impugned orders for the assessment years 2007-08, 2008-09, and 2010-11 to 2013-14 concerning this issue and directed respondent No.2 to grant a fresh hearing.

Issue 3: Tax on miscellaneous income
The petitioner did not contest this issue before the court, indicating a willingness to prefer statutory appeals for this matter.

Issue 4: Tax on handling charges paid on transportation of goods
This issue was not specifically contested by the petitioner in the court proceedings.

Issue 5: Disallowance of exemption of printed material on sale of brochures
This issue was not specifically contested by the petitioner in the court proceedings.

Issue 6: Disallowance of exemption of aluminum domestic utensils on the sales of non-sticky fry pan and non-sticky tawa
This issue was not specifically contested by the petitioner in the court proceedings.

Issue 7: Disallowance of exemption claimed on the sales of sauce pan
This issue was not specifically contested by the petitioner in the court proceedings.

Issue 8: Disallowance of exemption claimed on the sales of floral set of 3T light
This issue was not specifically contested by the petitioner in the court proceedings.

Additional Context:
The petitioner had also filed another set of petitions challenging the constitutionality of Sections 3(1), 3(2), and 24 of the 2006 Act, and Rule 8(3) of the 2007 Rules. These petitions were dismissed by a Division Bench, and a Special Leave Petition (SLP) was filed against the judgment, with leave granted and delay condoned by the Supreme Court.

Conclusion:
The court disposed of the writ petitions in terms of the directions provided, specifically setting aside the impugned orders concerning issue No.2 and granting the petitioner the liberty to prefer appeals for the remaining issues. The connected miscellaneous petitions were closed, and no order as to costs was made.