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TMI Blog2021 (4) TMI 503X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellate Authority, the 1st respondent is required to merely examine the correctness of the order passed based on the returns filed by an assessee. Therefore, if the first respondent as an Appellate Authority, finds that the petitioner had wrongly filed return by treating a transaction as that of an inter-state when it indeed it was that of a local sale, as an Appellate Authority, the 1st respondent was well within his rights to direct the Assessing officer to complete assessment in accordance with law - In the impugned order, the first respondent has not added any tax liability in the impugned order. The first respondent has merely directed the jurisdictional Assessing Officer to exercise the jurisdiction by revising the assessment. The original assessment which was impugned before the 1st respondent proceeded on a wrong assumption that the transactions were liable to tax under the provisions of the Central Sales Tax Act, 1956 when indeed the transaction in question was liable to tax under the provisions of the Tamil Nadu Value Added Tax Act, 2006. The direction in the impugned order to the Assessing Officer was not outside the scope of Section 52 of the Tamil Nadu Value Added ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate sales covered by C forms to the extent of ₹ 53,91,75,180.00. In respect of the above three disputes, it is observed from the assessment order that the learned assessing officer has levied tax at 3%, 2% and 12.5% on the turnover relating to Freight charges to the extent of ₹ 12,07,33,866.00, ₹ 53,91,75,180.00 and ₹ 3,53,887.00 on the ground that the freight charges has been paid by the assessee which is only a pre-sale expenses and accordingly, the expenses had been added to the value of sale. Perusal of the sample invoices filed by the appellants revealed the fact that the sale in the hands of the appellants is ex-factory. It was also noted in terms and conditions that the delivery is Ex-factory. It was also certified by the appellants that the amounts indicated represents prices actually charged and that there is no flow of additional consideration directly or indirectly from the buyer. The invoice raised proved that the delivery of the goods to the buyer takes place at the factory gate and only on the insistence of the buyer the delivery works has been taken by the appellants as it is not practically possible to inform the customer as the number ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s running from 1 to 10 in page 5 of this order is not being lengthly discussed as it has been accepted that the invoice comprises certain terms and conditions that was agreed between the buyer and seller and it acts as a part of the agreement between the buyer and the seller. Now coming to the decision of the Central Excise relied by the appellants with the assumption that the clearance of the goods from the factory as identical to the clearance of the goods from the factory consequent to the sale and the treatment of freight charges with respect to levy of excise duty it has been observed that all conclusions drawn are with reference to the sales are Ex-factory and the place of removal is factory premises. It was also observed in the decisions referred that the delivery to the carrier at factory gate is delivery to the buyer. It was also observed from the sale invoices filed that the goods once sold will not be taken back and the payment terms are immediate. All this along with delivery ex-factory and ex-factory price mentioned in the invoice proved that the responsibility of the seller being appellants ends as soon as the goods are delivered to the buyer. It is also made clear th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act, to assess a source of income which has not been processed by the Income Tax Officer and which is not disclosed either in the returns filed by the assessee or in the beyond the subject-matter of the assessment. In other words, the power of enhancement under Section 31(3) of the Act is restricted to the subject-matter of assessment or the sources of income which have been considered expressly or by clear implication by the Income Tax Officer from the point of view of the taxability of the assessee. It was argued by Mr Viswanath Iyer on behalf of the appellant that by applying the principle to the present case, the Appellate Assistant commissioner and jurisdiction to enhance the quantum of income of the assessee. It was pointed out that the fact of alleged transfer of ₹ 5,85,000 to for besganj branch was noted by the Income Tax officer and also the fact tht it did not reach Forbesganj on the same day. So, it was argued that in the appeal the Appellate Assistant commissioner had jurisdiction to deal with the question of the taxability of the amount of ₹ 5,85,000 and to hold that it was taxable as undisclosed profits in the hands of the assessee. We are unable to a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... view expressed uniformly about the limits of the powers of the Appellate Assistant Commissioner to enhance the assessment has been accepted by the legislature as the true exposition of the words of the section. If it were not, one would expect that the legislature would have amended Section 31 and specified the other intention in express words. The Income Tax Act was amended several times in the last 37 years, but no amendment of Section 31(3) was undertaken to nullify the rulings, to which we have referred. In view of this, we do not think that we should interpret Section 31 differently from what has been accepted in India as its true import, particularly as that view is also reasonably possible. 13. It is further submitted that in case the basis of assessment was to be altered, remedy under Section 55 of the TNVAT Act, 2006 was available to the Assessing Officer who assessed the returns under Tamil Nadu Vat Act, 2006 and it was not open for the Appellate Joint Commissioner (CT), the 1st respondent under Central Sales Tax Act, 1956 herein, to alter the very basis on which the assessment was completed by an authority under TNVAT Act, 2006 as the issue was confined only to non-p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lue Added Tax Act, 2006 reads as under:- 52. Appeal to Appellate Joint Commissioner : - (1) . . (2) The appeal shall be in the prescribed form and shall be verified in the prescribed manner and shall be accompanied by such fee not exceeding one hundred rupees, as may be prescribed. (3) In disposing of an appeal, the Appellate Deputy Commissioner may, after giving the appellant a reasonable opportunity of being heard, and for the sufficient reasons to be recorded in writing (a) in the case of an order of assessment (i) confirm, reduce, enhance or annul the assessment or the penalty or both; (ii) set aside the assessment and direct the Assistant Commissioner (Assessment) to make a fresh assessment after such further inquiry as may be directed; or (iii) pass such other orders as he may think fit; or (b) in the case of any other order, confirm, cancel or vary such order: Provided that at the hearing of any appeal, the Assistant Commissioner (Assessment) shall have the right to be heard either in person or by a representative. 21. Section 52 of the Tamil Nadu Value Added Tax Act, 2006 confers wide power on an Appellate Authorit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... view, Section 52(2) of the said Tamil Nadu Value Added Tax Act, 2006 cannot be interpreted in such a manner that an Appellate Authority will be forced to uphold a wrong assessment. Merely because the returns were filed by treating the transaction as that of the inter-state sale cannot means such wrong, assessment has to be upheld. 28. The decision of the Hon'ble Supreme Court in the case of Commissioner of Income Tax (Central), Culcutta Vs. Rai Bahadur Hardutroy Motilal Chamaria , (1967) 66 ITR 443 and another decision of the Hon'ble Supreme Court in Commissioner of Income Tax, Bombay City I, Bombay Vs. Shapoorji Pallonji Mistry , (1962) 44 ITR 891 (SC) rendered in the context of Section 31 of the ncome Tax Act, 1922 are not relevant to the facts of the present case and cannot be applied as first respondent has not enhanced the tax in the impugned order. 29. Though, these provisions are parimateria , the presence of Sub clause (b) to Section 52(3) of the Tamil Nadu Value Added Tax Act, 2006 makes all the difference. Both the provisions are reproduced below:- 35. Section 52 of the Tamil Nadu Value Added Tax Act, 2006 Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by an assessee. Therefore, if the first respondent as an Appellate Authority, finds that the petitioner had wrongly filed return by treating a transaction as that of an inter-state when it indeed it was that of a local sale, as an Appellate Authority, the 1st respondent was well within his rights to direct the Assessing officer to complete assessment in accordance with law. 33. In the impugned order, the first respondent has not added any tax liability in the impugned order. The first respondent has merely directed the jurisdictional Assessing Officer to exercise the jurisdiction by revising the assessment. The original assessment which was impugned before the 1st respondent proceeded on a wrong assumption that the transactions were liable to tax under the provisions of the Central Sales Tax Act, 1956 when indeed the transaction in question was liable to tax under the provisions of the Tamil Nadu Value Added Tax Act, 2006. 34. In my view, the direction in the impugned order to the Assessing Officer was not outside the scope of Section 52 of the Tamil Nadu Value Added Tax Act, 2006. The impugned order was based on the facts put forth by the petitioner. Therefore, I do not find ..... X X X X Extracts X X X X X X X X Extracts X X X X
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