Rectification for exempt freight charges must be considered on merits, even if the claim was not raised in assessment

A rectification application should not be refused merely because exemption for freight charges charged independently in invoices was not claimed at the original assessment stage. Where such freight is shown to be outside the assessable turnover under rule 6(c) of the Tamil Nadu General Sales Tax Rules, the taxing authority must examine the request on its merits and cannot let an assessment stand if it includes turnover not liable to tax. The authority is required to adopt a justice-oriented approach and allow the assessee to adduce acceptable evidence in support of the claimed exemption.

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Issues: Whether the taxing authority was bound to entertain the petitioner's application for rectification where freight charges charged independently in the invoices were claimed to be exempt from inclusion in the assessable turnover under rule 6(c) of the Tamil Nadu General Sales Tax Rules.

Analysis: The exemption for freight charged independently was recognised as a substantive relief available in law, and the mere fact that it had not been claimed at the original assessment stage did not justify refusal to consider rectification. The authority could not decline to examine whether an item not liable to tax had been included in the assessment merely because the record did not then contain the claim. If the turnover was shown to consist of exempt freight charges, maintaining the assessment would perpetuate an illegality. Taxing authorities were therefore required to adopt an equitable and justice-oriented approach in procedural matters and consider the rectification request on its merits.

Conclusion: The application for rectification was required to be entertained and decided in accordance with law, with liberty to the petitioner to adduce acceptable evidence in support of the exemption.

Ratio Decidendi: A rectification application should not be rejected merely because an exempt item was not claimed at the original assessment stage, if the mistake is capable of correction and the assessment may otherwise include turnover not liable to tax.

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