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TMI Blog2019 (11) TMI 423X X X X Extracts X X X X X X X X Extracts X X X X ..... , in the present case, has proceeded to assess the transaction as sale of equipment, taxable at the rate of 20%, that by itself cannot lead to an inference of suppression and a bonafide difference of opinion on the interpretation of a taxing statute cannot be ruled out. In the facts and the circumstances of the present case, particularly bearing in mind that no personal hearing has been granted to the petitioner, I am inclined to set aside the assessments, to be re-done de novo for both periods 2004-05 and 2005-06, on merits. The assessee shall appear before the Assessing Authority on 30.10.2019 at 10.30. a.m. No further notice need be issued in this regard. Assessment periods 2002-03, 2003- 04 and 2004-05 - Orders of assessment dated 27.02.2007 are impugned in relation to assessment periods 2002-03 and 2003-04 and show cause notice dated 27.02.2007 for the period 2004-05 - whether the provisions of Section 12C and the procedure for expedited assessment provided therein could also be sought by an assessee where there had been proceedings for assessment initiated even prior to 01.04.2006? - HELD THAT:- The tenor of Section 12C, to my mind, appears to be that assessments in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of exemption have been made by the petitioner for the previous and later years and the Assessing Authority has, on an examination of relevant documents, accepted the claim for exemption. The conclusion of the Assessing Authority turns on the position that the petitioner has not supplied cotton yarn for export but has, in fact, supplied cloth manufactured from out of the cotton yarn, for export. Learned counsel for the Revenue is unable to produce a copy of the Clarification and instead circulates a copy of the Exemption Notification to which I have already made reference. The fact that the petitioner has indeed supplied manufactured cotton is not denied by it - the case of the petitioner is admitted, simply on the anvil of consistency. Though a ground has been raised questioning the validity of the present assessment in the light of Section 12 C of the TNGST Act, this ground is given up by the learned counsel for the petitioner in the course of the hearing. Petition allowed. - Writ Petition Nos.12166 & 12167 of 2007 18254 & 18255 of 2008 11364 to 11366 of 2007 M.P. Nos.1 & 1 of 2007, 1 and 1 of 2008 and 1,1,1 and 2,2,2 of 2007 - - - Dated:- 4-10-2019 - Dr. Justi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay of April 2006 shall be on the basis of the return relating to his turnover and on the basis of the declaration or certificate as may be prescribed, furnished on or before the 31st March 2007 and such return shall be accepted without requiring the presence of the dealer or production of books of accounts by the dealer subject to such conditions as may be prescribed: Provided that this sub-section shall not apply to a dealer who has filed an appeal or other proceeding in respect of any assessment for the period referred to in this sub-section and is pending before the High Court or the supreme Court, as the case may be. (2) Every dealer who claims to be not liable to pay tax and has not filed return, shall file the return on or before the 31st March 2007 in the prescribed manner relating to his turnover for the period prior to the 1st day of April 2006 and such return shall be accepted, subject to the provisions of section 16, failing which his registration shall be cancelled, after giving him a reasonable opportunity of being heard.' Rule 15(5-E): '(5-E) The conditions to be satisfied by a dealer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eturns have been filed and declaration forms and certificates submitted in support of their claim of exemption or concessional rate of tax. (2) The assessing authorities should sort out the assessment files where there is no need to file saleable forms differentiated from the files involving saleable forms. (3) Wherever no saleable forms are involved, they have to pass orders accepting the turnovers reported by the dealers. Even if there is mistake / error in a return, they should pass orders without calling for accounts. Thereafter, they can revise the order, wherever necessary. (4) Wherever the declaration forms or certificates prescribed have not been submitted, notices must be issued immediately by disallowing the concessional rate of tax / exemption specifying the date (within 90 days) before which the records should be filed. (5) In case the forms and declarations were not filed within the stipulated time, orders should be passed disallowing the claim of concessional rate of tax / exemption. (6) If the declaration forms or certificates are produced subsequently after passing of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tioner. No personal hearing as sought for was provided. 10. With respect to the assessment relating to the period 2004-05 though the provisions of Section 12 C have been invoked the Assessing Authority has dealt with the request in the following terms: ' Request to complete the assessment under Sec.12-C According to sub Rule 5(5) (6) of Rule 15 the relevant year of assessment should not be the first or last year of business and according to Sub Rule 5(E) (3) of Rule 15 during the relevant assessment year the dealer should not have attempted to cancel or suppress tax liability of more than twenty five thousand rupees. In this case the dealers had commenced their business in Oct'04 i.e. during the assessment year only. Further more the Enforcement wing officers during the course of their inspection on 27.7.05 noticed tax suppression. In view of the above, their assessment cannot be completed under section 12 C of the Act, as the conditions stipulated in the act and also the circular instructions of the commissioner of Commercial Taxes, Chennai are not fulfilled by the dealers. Hence they are not eligi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of law vis-a-vis the petitioner and the respondent. In the present case, it is a legal dispute as to whether the transaction in question constitutes works contract, taxable at 4% or sale of equipment, taxable at 20%. Though the Assessing Authority, in the present case, has proceeded to assess the transaction as sale of equipment, taxable at the rate of 20%, that by itself cannot lead to an inference of suppression and a bonafide difference of opinion on the interpretation of a taxing statute cannot be ruled out. 15. In the facts and the circumstances of the present case, particularly bearing in mind that no personal hearing has been granted to the petitioner, I am inclined to set aside the assessments, to be re-done de novo for both periods 2004-05 and 2005-06, on merits. 16. This order is passed bearing in mind that we are today in 2019, and the scheme of expedited assessment proceedings under Section 12C has long since elapsed. The need of the hour is to bring in finality to long pending assessments and this can best be achieved by avoiding technical distractions and instead focusing on substantive matters. 17. The assessee sha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as personal hearing afforded to the petitioner prior to 01.04.2006, such proceedings pending completion as on 01.04.2006. The impugned orders of assessment though dated 27.02.2007 do not refer to the provisions of Section 12 C at all. 22. Admittedly, in these cases the assessee has only invoked the applicability of Section 12C only after completion of assessment, by communication dated 19.03.2007 wherein for the first time Section 12 C is referred to and a request made to the Assessing Officer to cancel the assessment order and to recall the same. This request has been pending with no reply, hence prompting the assessee to approach this Court by way of the present Writ Petitions. 23. In counter, the Assessing Authority relies on the provisions of Rule 15 (5-E) alleging suppression on the part of the petitioner and hence justifying the non-applicability of Section 12 C for the periods of assessment in question. 24. According to the Assessing Authority, the petitioner has disguised taxable turnover as stock transfers and this would amount to suppression in terms of Rule 15(5-E). The relevant provisions have already been extracted els ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has also been found by the Tribunal that the fact that there was high demand for the goods of the assessee was the reason for the coincidence of the quantity moved to the branch office corresponding to the quantity delivered from the branch office to the customers. The Tribunal has also held that the invoices that had been prepared in the assessee's factory were subsequent to the preparation of the invoice at the branch office, and that the sales were in fact effected from the branch office and not from the factory. The Tribunal has concluded that there was no contract pursuant to which the goods had moved to destinations outside the State and that in fact the goods were moved as stock transfers from the assessee's factory to the branch office outside the state. It has also held that the local sales tax had been paid on the local sales effected in the states where the assessee maintained depots. The essential ingredients of the contract of sale pursuant to which the goods could be said to have been moved being, absent and the existence of such a contract also not having been inferred from the proved facts. It is not possible to accept the contentions for the Revenue that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the observations made above, I am inclined to set aside the impugned orders as well as show cause notice. The respondent is at liberty to pass a deemed assessment in terms of Section 12 C within a period of two (2) weeks from the date of receipt of a copy of this order. It is also made specifically clear that the respondent is at liberty to initiate proceedings for re-assessment in terms of Section 16 of the Act, in accordance with the applicable timelines and in accordance with law. 30. These Writ Petitions are allowed in the aforesaid terms. 31. Consequently, connected Miscellaneous Petitions are closed. No costs. W.P.Nos.12166 and 12167 of 2007 32. Heard Mr.Raveendran, learned counsel for the petitioner and Mr.Haribabu, learned Additional Government Pleader for the respondent. 33. The challenge is to orders of assessment dated 16.01.2007 passed in terms of the provisions of the Tamil Nadu General Sales Tax Act, 1959 (in short, 'TNGST Act') as well as under Central Sales Tax Act, 1956 (in short 'CST Act') for the assessment period 2004-05. The petitioner manages a spinning mi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... satisfaction of the assessing authority concerned. (G.O. No.2398, Revenue, dated 27.07.1970) (Notn.No.197(a) of 1970), dated 27.07.1970) (Gazette Notn. Dated 28.07.1970)' 36. The Notification supports the claim of exemption and has been applied in the assessments of the petitioner for previous and subsequent years. While this is so, the Assessing Authority refers to a Clarification issued by the Special Commissioner and Commissioner of Commercial Taxes dated 29.11.2006 which, according to him, stipulates that if the cotton yarn purchased is converted into cloth, then the benefit of G.O.No.197 dated 27.07.1990 is not available to such assessees. The conclusion of the Assessing Authority turns on the position that the petitioner has not supplied cotton yarn for export but has, in fact, supplied cloth manufactured from out of the cotton yarn, for export. Learned counsel for the Revenue is unable to produce a copy of the Clarification and instead circulates a copy of the Exemption Notification to which I have already made reference. The fact that the petitioner has indeed supplied manufactured cotton is not denied by it. However, the interpretat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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