2017 (10) TMI 604 - HC - VAT and Sales Tax

Validity of assessment order - the petitioners have violated the conditions of the EOU status, as they have not qualified themselves for exemption and there is a shortfall in the export of the goods - Held that - when the Assessing Officer issued a notice to establish whether the petitioners have fulfilled their export obligations, it was the duty on the part of the petitioners to appear before the Assessing Officer and produce necessary documents in support of their stand. The petitioners have failed to do so - there is no error in the impugned assessment orders, dated 18.04.2005 nor in the consequential demand, which are impugned in these Writ petitions. The petitioners should be directed to go back to the Assessing Officer and clearly explain their stand as to how the allegation made against them is unsustainable - petition disposed off.

Summary

Issues:
Challenging assessment order under Tamil Nadu General Sales Tax Act 1959 for violation of Export Oriented Unit (EOU) conditions.

Analysis:
The petitioners contested an assessment order dated 18.04.2005 by the Assessing Officer for the assessment year 2002-2003 under the Tamil Nadu General Sales Tax Act 1959. The order stated that the petitioners did not qualify for exemption under the Export Oriented Unit (EOU) status due to a shortfall in goods export. The petitioners argued that the Joint Development Commissioner had certified on 26.12.2001 that they had not violated any EOU conditions. However, they failed to respond to a notice from the Assessing Officer dated 12.11.2004, which led to the assessment order being passed after waiting for four months.

The petitioners referred to a decision by the Tamil Nadu Taxation Special Tribunal in a similar case, where the Tribunal directed the Assessing Authority not to pursue action based on a circular. The Assessing Officer's notice dated 12.11.2004 was deemed in line with the Tribunal directions. The petitioners were required to appear before the Assessing Officer and provide supporting documents for their export obligations, which they failed to do. Consequently, the assessment orders and the consequential demand were upheld.

However, considering the prolonged pendency of the writ petitions since 2005 and an interim stay order, the court directed the petitioners to return to the Assessing Officer to clarify their position within fifteen days. The court instructed the Assessing Officer to provide a personal hearing and re-do the assessment, taking into account relevant tribunal and appellate orders. No coercive action was to be taken against the petitioners until the new assessment was completed. The writ petitions were disposed of with these directions, and no costs were awarded.