2022 (3) TMI 353 - HC - VAT and Sales Tax

Raising Demand while the application for Rectification of mistake is pending - apparent error on the face of record or not - time limitation for rectification of mistake from date of making assessment - HELD THAT - Section 84 of the TNVAT Act makes it clear that, within six years from the date of order of assessment made by either the assessing authority or appellate authority or revising authority, including appellate Tribunal, if the dealer / assessee finds certain error apparent on the face of the record, in order to rectify the same, a rectification application can be made. If such application is made, that shall be considered and decided by either of these authorities before whom such application has been made under Section 84 and it shall be decided as to whether the rectification sought for by the dealer has to be made or such a request has to be rejected on merits - Here in the case in hand, admittedly there has been an application under Section 84 of the Act on 08.10.2018 and even though some rectification order has been passed on 04.02.2019, it has been specifically mentioned that, the said rectification under Section 84(1) of the Act is for the assessment year 2010-11. While the Section 84 application was pending consideration, without deciding the same by passing express order in this regard, the respondent Revenue cannot proceed further to make a demand on the original assessment. Therefore, this Court has no hesitation to hold that the present demand dated 27.02.2019 is infirm and therefore, it is liable to be interfered with. The matter is remitted back to the respondent, who shall consider the rectification application submitted by the petitioner dated 08.10.2018 for all the five years from 2009-10 to 2013-14 and pass orders thereon on merits and in accordance with law - Petition allowed by way of remand.

Summary

Issues:
1. Interpretation of Section 84 of the TNVAT Act regarding rectification applications.
2. Consideration of rectification applications for multiple assessment years.
3. Validity of demand made by Revenue pending consideration of rectification application.

Analysis:
1. The petitioner, a dealer in cement products registered under the TNVAT Act, filed a Writ petition seeking a Writ of Certiorarified Mandamus to quash proceedings and direct consideration of a petition filed under Section 84 of the Act. The petitioner alleged that despite regularly filing returns and paying taxes, discrepancies were found during an inspection leading to assessment orders and subsequent rectification applications.

2. Section 84 of the TNVAT Act allows dealers to file rectification applications within six years of an assessment order if errors are apparent on record. The petitioner filed a rectification petition for multiple assessment years, but the Revenue only rectified errors for one year, leading to a dispute regarding the consideration of rectification applications for all years. The court emphasized the need for authorities to decide on rectification requests before making demands based on original assessments.

3. The court held that the Revenue's demand for taxes for multiple years without deciding on the rectification application was invalid. It directed the respondent to consider the rectification application for all years and pass orders within six weeks. The judgment highlighted the importance of following due process and considering rectification requests before making demands based on original assessments, ensuring fairness and adherence to legal procedures.