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2021 (10) TMI 123 - HC - VAT and Sales TaxValidity of assessment orders - assessment orders challenged on the ground that the revision of assessment stating that the appellant has not filed the option letter in terms of Section 6(2) of the TNVAT Act is not sustainable - whether there is a need for a registered dealer to file an option letter in a particular format and does the Act prescribed any such format? - HELD THAT - Since the appellant had questioned the very jurisdiction of the authority to treat the returns filed by the appellant as returns other than exercising option under Section 6(1) of the TNVAT, it is one of the exceptions which has been carved out to enable the aggrieved person to approach this Court under Article 226 of the Constitution of India though an alternative remedy is provided for - the writ petition has been pending from the year 2018 onwards and the issue being a legal issue, namely, as to whether in the absence of a written form or procedure or exercising the option whether a return filed by payment of compounded rate of tax would deem to be an option exercised by the dealer to pay taxes at compounded rates is a legal question which cannot be decided by the Appellate Authority under the provisions of the TNVAT Act and this is all the more a reason that the appellant should be permitted to approach this Court. Therefore, the writ petitions were maintainable. The order passed in the writ petitions are set aside, consequently the orders of assessment passed by the respondent are set aside - the matter is remanded to the Assessing Officer to treat the returns filed by the assessee under Section 6(1) of the TNVAT Act and proceed to complete the assessment in accordance with law - Petition allowed by way of remand.
Issues Involved:
1. Validity of assessment orders based on the absence of an option letter under Section 6(2) of the TNVAT Act. 2. Whether filing a return and paying tax at compounded rates constitutes exercising the option under Section 6(1) of the TNVAT Act. 3. Maintainability of writ petitions despite the availability of an alternate remedy. Issue-Wise Detailed Analysis: 1. Validity of Assessment Orders Based on the Absence of an Option Letter under Section 6(2) of the TNVAT Act: The appellant challenged the assessment orders dated 04.06.2018 on the grounds that they were contrary to the law established in previous cases. The appellant, a registered dealer under the TNVAT Act, filed returns in Form-L and opted to pay lumpsum tax at 2% under the compounding levy scheme as per Section 6 of the TNVAT Act. The returns were accepted by the Assessing Officer. However, following an inspection by the Enforcement Wing Officers, the Assessing Officer issued a notice stating that the appellant had not filed the required option letter for payment of tax under the compounding scheme, as mandated by Section 6(2) of the TNVAT Act. Consequently, the appellant's tax liability was re-computed. 2. Whether Filing a Return and Paying Tax at Compounded Rates Constitutes Exercising the Option under Section 6(1) of the TNVAT Act: The primary question was whether the appellant, by filing a return and paying tax at 2%, had effectively exercised the option to pay tax under Section 6(1) of the TNVAT Act. The court referred to a similar case, K.Ramasamy vs. Deputy Commercial Tax Officer, where it was held that there is no prescribed format or procedure for exercising the option under the TNGST Act. The court concluded that by filing a return and paying tax at the compounded rate, the dealer had exercised the option under the relevant provision. This precedent was applied to the present case under the TNVAT Act, which also lacks a specific procedure for exercising the option. Therefore, the appellant's filing of returns and payment of 2% tax was deemed to be an exercise of the option under Section 6(1). 3. Maintainability of Writ Petitions Despite the Availability of an Alternate Remedy: The writ petitions were dismissed on the grounds that the appellant should have availed the alternate remedy of appeal provided under the TNVAT Act. However, the court held that since the appellant questioned the jurisdiction of the authority to treat the returns as non-compliant with Section 6(1) of the TNVAT Act, this constituted an exception allowing the appellant to approach the court under Article 226 of the Constitution. The court cited the Supreme Court's decision in Radha Krishan Industries vs. State of Himachal Pradesh, which outlined exceptions to the rule of alternate remedy, including cases where the statutory authority has not acted in accordance with the law or has violated fundamental principles of judicial procedure. Conclusion: The court allowed the writ appeals, set aside the impugned orders, and remanded the matter to the Assessing Officer. The Assessing Officer was directed to treat the returns filed by the appellant under Section 6(1) of the TNVAT Act and complete the assessment in accordance with the law. The court emphasized that the appellant's case fell within the exceptions to the rule of alternate remedy, making the writ petitions maintainable.
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