2017 (8) TMI 971 - HC - VAT and Sales Tax

Levy of tax - sale of coffee - tax levied on the ground that the petitioner has not produced the certificate obtained from the Auctioneers to prove that the coffee sold by them has suffered tax - Held that - this Court is convinced that the respondent has failed to discharge his statutory obligation in considering the petitioner s representation enclosing the tax-paid certificates issued by the Coffee Board / Autioneers. For such reason, the matter requires to be remanded to the respondent for fresh consideration - appeal allowed by way of remand.

Summary

Issues involved:
Challenge of proceedings as barred by limitation, assessment and levy of tax on sale of coffee, non-production of tax-paid certificates, statutory circular by Commissioner binding on respondent, failure to consider petitioner's representation, remand for fresh consideration.

Analysis:
The petitioner challenged the impugned proceedings as being barred by limitation, but later withdrew this contention to focus on other issues. The respondent had completed the assessment and levied tax on the sale of coffee, citing non-production of tax-paid certificates as the primary reason. The petitioner submitted a representation highlighting that the issue was not raised by the Assessing Officer initially, and they were not called upon to produce the certificates. The petitioner enclosed tax-paid certificates and a circular directing acceptance of such certificates even after final assessment. However, no orders were passed to revise the assessment despite reminders, leading to the filing of writ petitions.

In response, the respondent argued that the tax-paid certificates were not relevant as the sale was an inter-state transaction. The court noted that the re-assessment order specifically mentioned the absence of certificates as the basis for taxation. It held that the respondent could not disregard the circular issued by the Commissioner, which bound them. Consequently, the court found that the respondent had failed to fulfill their statutory obligation by not considering the petitioner's representation and the enclosed certificates. Thus, the court decided to remand the matter to the respondent for fresh consideration.

As a result, the writ petitions were allowed, the impugned proceedings were set aside, and the matter was remanded to the respondent for a fresh hearing. The respondent was directed to schedule a date for a personal hearing where the petitioner's representative would present the tax-paid certificates. The respondent was then instructed to consider the certificates and proceed further in accordance with the law. No costs were awarded, and connected miscellaneous petitions were closed.