2021 (4) TMI 820 - HC - VAT and Sales Tax

Rectification of mistake - error apparent on the face of record - non-production of Form F declaration - Validity of assessment order - HELD THAT - The Hon'ble Court in the case of State of Tamil Nadu Vs Arulmurugan and Company 1982 (11) TMI 143 - MADRAS HIGH COURT , held that the Tribunal has power to receive C forms at the time of the appeal for sufficient cause. Even assuming that the Assessing Officer has completed the assessment and the assessee files an appeal before the first appellate authority and in the appeal, Form F declaration is filed, the appellate authority is entitled to entertain the same and issue appropriate directions to the assessing authority to redo the assessment. Undoubtedly, in the instant case, the respondent has not preferred an appeal to the first appellate authority, but however, taking note of the fact that the allegation against the appellant is one of local sale, onus of proving the same is with the Department and this conclusion was arrived at by the assessing authority on account of non-production of Form F declaration and if Form F declaration is available with the assessee at this juncture, it is found that there will be no error in law in directing the Assessing Officer to redo the assessment as the Assessing Officer is not an adversary to the dealer and he is bound to make a proper assessment and calculate the rate of tax. The Assessing Officer/appellant is directed to redo the assessment by receiving the Form F declaration, verify the genuineness, etc., and complete the assessment in accordance with law, after affording an opportunity of personal hearing to the authorized representative of the assessee - Appeal allowed by way of remand.

Summary

Issues:
Challenge to assessment order under PVAT Act for the year 2010-11, Power of Assessing Officer under Section 73 of PVAT Act, Entertaining Form-F declaration at the appeal stage, Remand to Assessing Officer for redoing assessment.

Analysis:
The writ appeal was filed by the Commercial Taxes Department challenging the order passed in response to the challenge to the assessment order under the PVAT Act for the year 2010-11. The respondent, a registered dealer, did not file objections to the pre-assessment notice but sought an extension of time, which was not fully utilized. The Assessing Officer completed the assessment on a best judgment basis. The Single Bench remanded the matter to the Assessing Officer to consider the respondent's representation and Form-F declaration. The power under Section 73 of the PVAT Act allows rectification of errors apparent on the face of the record within 3 years, with a dealer's right to be heard if it results in enhancing an assessment or penalty.

The Assessing Officer's power under Section 73 is not to reopen assessments but to rectify errors. Accepting Form-F declaration does not rectify an assessment order; it requires a reassessment, which the Assessing Officer cannot do. Referring to a Full Bench decision, the Court highlighted the role of the appellate authority in tax appeals, stating that it can enter the assessment process and direct reassessment based on new evidence. In this case, even without an appeal to the first appellate authority, if Form F declaration is available and could impact the assessment, the Assessing Officer should redo the assessment to ensure a proper calculation of tax rates.

The Court confirmed the direction to redo the assessment, emphasizing that the Assessing Officer is not an adversary to the dealer but must conduct a proper assessment. The judgment dismissed the writ appeal and directed the Assessing Officer to redo the assessment, including verifying the Form F declaration's genuineness and conducting the assessment in accordance with the law while providing an opportunity for the authorized representative of the assessee to be heard. The assessee was instructed to cooperate in the assessment proceedings, with no costs awarded.