2017 (12) TMI 1426 - HC - VAT and Sales Tax

Revision of assessment - Levy of tax @ 5% to 100% EOU - absence of documentary proof - disallowance of exemption of turnover - Held that - the necessity to set aside the impugned assessment orders does not arise, as, on the date of passing of the assessment orders, the documents now in the possession of the petitioner were not placed before the Assessing Officer. Therefore, the Assessing Officer cannot be faulted for having completed the assessment in the manner done so in the impugned assessment orders. However, the claim for exemption is an incentive granted to a local manufacturer when he effects sales to 100% export oriented units. Therefore, the claim for exemption should not be denied on technicalities, but the claim has to be verified and if the petitioner produces necessary documents to the satisfaction of the Assessing Officer that they effected sales to 100% export oriented units, then the benefit of exemption should accrue to the petitioner. The Assessing Officer is directed to afford an opportunity of personal hearing to the petitioner, peruse the documents and if the documents are in order, sanction the claim for exemption by passing revised orders - petition allowed by way of remand.

Summary

Issues:
Assessment of tax liability on sales to 100% export oriented units; Revision of assessment orders for years 2014-15 and 2015-16; Claim for exemption based on documentary evidence; Jurisdiction of the Assessing Officer; Petitioner's possession of green card copies; Opportunity to present documents for exemption claim; Denial of claim on technicalities; Directions to Assessing Officer for verification; Apprehension regarding statutory appeals and petition under Section 84 of the Tamil Nadu Value Added Tax Act, 2006.

Analysis:
The judgment involves the assessment of tax liability on sales made to 100% export oriented units by a manufacturer registered under the Tamil Nadu Value Added Tax Act, 2006 and the Central Sales Tax Act, 1956. The respondent issued notices proposing to revise the assessments for the years 2014-15 and 2015-16 due to lack of documentary evidence supporting the claim for exemption. The petitioner had produced green card copies for some units but not for all, leading to the disallowance of the exemption claim by the Assessing Officer.

The court acknowledged that the petitioner did not provide documentary proof for all units at the time of assessment, thus justifying the actions of the Assessing Officer. However, considering the importance of the exemption as an incentive for manufacturers selling to 100% export oriented units, the court directed the Assessing Officer to consider any additional documents presented by the petitioner to support the exemption claim for the remaining units.

The petitioner expressed concerns about the possibility of rejection if filing a petition under Section 84 of the Tamil Nadu Value Added Tax Act, 2006, due to previous time-barred appeals. The court assured the petitioner that appropriate directions would be issued to the Assessing Officer, emphasizing that the exemption should not be denied on technical grounds but verified based on the presented documents to ensure the benefit accrues to the petitioner.

In conclusion, the court disposed of the writ petitions by instructing the petitioner to submit petitions to the respondent along with green card copies for the remaining units. The Assessing Officer was directed to review the documents, grant a personal hearing to the petitioner, and sanction the exemption if the documents were satisfactory. The court also prohibited coercive actions for tax recovery until the verification process was completed, allowing the petitioner to provide documents for all units to potentially claim exemption.