2018 (2) TMI 1545 - HC - VAT and Sales Tax

Validity of pre-revision notice - pre-revision notice issued without exhausting the statutory alternative remedy - Held that - It is not in serious dispute that the appellant in response to the pre-assessment notice originally submitted its objections on 29.04.2011 stating among other things that due to the wrong entry in the computers for the respective months the error has occurred and while verification the Statutory Auditor revealed the said fact and certification of correct turnover has also been obtained and therefore prays for dropping of the proposal for levying additional sales tax and it is also followed by yet another objections dated 18.05.2011. The appellant without attending the personal hearing has rushed to the Court and filed the Writ Petition and it was entertained and they had the benefit of interim orders and the writ petition ultimately came to be dismissed on the ground that it is a premature one. This Court on an independent application of mind is of the considered view that there is no error apparent on the face of the record - petition dismissed as pre-mature.

Summary

Issues involved: Challenge to pre-assessment notice under TNGST Act, 1959; Non-attendance at personal hearing; Prematurity of Writ Petition; Interpretation of Tamil Nadu Additional Sales Tax (Amendment) Act, 1996.

Analysis:

1. Challenge to pre-assessment notice under TNGST Act, 1959:
The Writ Petitioner, a registered Partnership Firm and dealer under TNGST Act, challenged a pre-assessment notice proposing a substantial tax liability and penalties. The Petitioner contended that errors in computer entries led to the discrepancies in turnover assessment. Despite submitting objections and attending a personal hearing, the Writ Petition was dismissed as premature, citing previous judgments disallowing challenges to pre-revision notices in courts.

2. Non-attendance at personal hearing:
The Writ Petitioner failed to attend the scheduled personal hearing despite submitting objections and seeking reconsideration of the assessment. The Court noted the missed opportunity for direct engagement with the tax authorities before resorting to legal action, emphasizing the importance of exhausting statutory remedies before approaching the judiciary.

3. Prematurity of Writ Petition:
The Court highlighted the premature nature of the Writ Petition challenging the pre-assessment notice, as per established legal principles barring challenges to preliminary notices in courts. The dismissal was based on the understanding that statutory remedies should be pursued before seeking judicial intervention, ensuring proper administrative processes are followed.

4. Interpretation of Tamil Nadu Additional Sales Tax (Amendment) Act, 1996:
The appellant argued that the assessment was unsustainable under the Tamil Nadu Additional Sales Tax (Amendment) Act, 1996, which required principals to consolidate agents' turnover for tax purposes. However, the Court refrained from delving into this argument, emphasizing the need for the appellant to attend the personal hearing and engage with the tax authorities as mandated by relevant circulars.

In conclusion, the Writ Appeal was dismissed, but the second respondent was directed to issue a fresh notice for a personal hearing. The appellant was instructed to attend the hearing and present all relevant objections and materials for reconsideration within a specified timeframe. The judgment underscored the importance of exhausting administrative remedies, attending personal hearings, and following due process before seeking judicial redress in tax matters.