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2017 (12) TMI 537 - HC - VAT and Sales TaxDefective application - application for waiver of penalty - Exemption from payment of tax - Held that - In somewhat similar circumstances, the Hon ble Division Bench in the case of Chetak Timber Products (P) Ltd., vs. Joint Commissioner and another 2014 (9) TMI 72 - MADRAS HIGH COURT , held that when there is a defective application, the Designated Authority should return the application for rectification. The reason assigned by the first respondent to state that the petitioner s application does not comply with the conditions of the Samadhan Act, is incorrect and for all practical purposes, the payment effected by the petitioner by paying 10% of the penalty and 25% of the interest as provided for under Section 7(c) of the Samadhan Act, should date back to 13.11.2006 - the matter is remanded to the first respondent for fresh consideration, who shall take on file the application for settlement - appeal allowed by way of remand.
Issues involved:
1. Grant of exemption from payment of sales tax under TNGST Act. 2. Application for waiver of penalty under Section 16(B) of TNGST Act. 3. Rejection of application under the Tamil Nadu Sales Tax (Settlement of Arrears) Act, 2006 (Samadhan Act). 4. Classification of the petitioner's case under Section 7 of the Samadhan Act. 5. Violation of principles of natural justice in rejecting the application. 6. Correct interpretation of the Samadhan Act and proper procedure for application rejection. Analysis: 1. The petitioner, a Workers Cooperative Society, sought exemption from sales tax under the TNGST Act for the year 1989-90. Despite being assessed to tax and not challenging the assessment, the petitioner applied for waiver of penalty under Section 16(B) of the TNGST Act, leading to subsequent legal proceedings. 2. The enactment of the Samadhan Act in 2006 allowed dealers to settle tax arrears by filing applications. The petitioner's application was rejected under Section 7 of the Samadhan Act due to a classification dispute, leading to legal challenges regarding the proper categorization of the application. 3. The rejection of the petitioner's application under the Samadhan Act was found to be in violation of principles of natural justice, as the petitioner was not given an opportunity to address the issues before the rejection. This lack of procedural fairness was a significant factor in the legal dispute. 4. The court emphasized the importance of correct classification under the Samadhan Act, citing a previous judgment where it was held that a defective application should be returned for rectification. The incorrect rejection of the petitioner's application based on classification without allowing for rectification was deemed illegal. 5. Ultimately, the court allowed the writ petition, setting aside the impugned order and remanding the matter for fresh consideration. The first respondent was directed to reevaluate the application, provide a personal hearing to the petitioner, and make a decision in accordance with the law. The court highlighted the need for procedural fairness and correct interpretation of the statutory provisions in tax matters.
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