2020 (11) TMI 791 - HC - VAT and Sales Tax

Maintainability of (second) appeal - first appeal had been numbered and heard on merits - fact that as per Sec.55(4) of the TNGST Act, an appeal would lie against an order passed u/s.55 of the Act is overlooked - in respect of the very same transaction, tax under the CST Act, 1956, had been paid in the State of Andhra Pradesh and the levy under the TNGST Act, 1959 - double taxation or not. HELD THAT - The Original Assessment order does not merge with the Rectification Order passed by the Assessing Authority. In the present case, the Rectification as prayed by the Assessee only was allowed by the Assessing Authority himself and therefore, there are no reason for the Assessee to to file further Appeal against such Rectification Order in his own favour. It is difficult to understand what prevented the Assessee from assailing the Original Assessment Order dated 31.3.1995 itself. The submission made by the learned counsel for the Assessee that the Original Assessment Order stood merged with the Rectification Order is misconceived and is liable to be rejected. It is only if the Appellate Order is passed on the merits of the case, then the Original Assessment Order can merge with the Appellate Order and not in a case like this where the Rectification Order is passed at the instance of the Assessee itself and as requested by it. In the absence of any challenge to the Original Assessment Order, the Assessee cannot, obviously, be allowed to assail the original Assessment Order by laying a tangent challenge to the Rectification order. Whether the local Sales Tax was rightly imposed by the Assessing Authority or not can be seen only if the Original Assessment Order is challenged by the Assessee before the Appellate Authority. Since the Rectification Order does not discuss anything about the legality of the imposition of the local Sales Tax or otherwise, it cannot be permitted to the Assessee to assail the Original Assessment Order in the aforesaid manner. The present Tax Revision filed by the Assessee is without any merit and the same is liable to be dismissed - Revision dismissed.

Summary

Issues:
1. Maintainability of the appeal before the Appellate Tribunal.
2. Interpretation of provisions under the TNGST Act regarding appeal rights.
3. Double taxation concern due to tax paid under CST Act.

Issue 1: Maintainability of the appeal before the Appellate Tribunal
The Assessee challenged an order before the Appellate Tribunal, which was dismissed as infructuous by the Appellate Assistant Commissioner. The Tribunal held that the rectification under Section 55 of the TNGST Act was allowed as requested by the Assessee, rendering the appeal infructuous. The Tribunal emphasized that the original assessment order remained intact, and the rectification did not assess any escaped turnover for tax. As the appeal was also time-barred, the Tribunal concluded that the appeal was not maintainable on both grounds.

Issue 2: Interpretation of provisions under the TNGST Act regarding appeal rights
The Assessee contended that the original assessment order merged with the rectification order, making the appeal against the rectification order maintainable. However, the Court disagreed, stating that the rectification was allowed at the Assessee's request and did not involve a challenge to the original assessment order. The Court highlighted that the Assessee should have challenged the original assessment order itself if there were concerns about the imposition of local Sales Tax. Since the rectification order did not address the legality of the tax imposition, the Assessee could not challenge the original assessment order through the rectification order.

Issue 3: Double taxation concern due to tax paid under CST Act
The Assessee argued that tax paid under the CST Act for inter-State sales was wrongly adjusted against local Sales Tax in the assessment order. This led to a concern about potential double taxation. However, the Court noted that the Assessee did not challenge the original assessment order directly, which was crucial to address the issue of tax imposition correctly. The Court emphasized that without challenging the original assessment order, the Assessee could not dispute the imposition of local Sales Tax.

In conclusion, the Court dismissed the Tax Revision filed by the Assessee, ruling against the Assessee and in favor of the Revenue. The Court found no merit in the Assessee's arguments and upheld the decision of the Tribunal regarding the maintainability of the appeal.