2011 (11) TMI 656 - SC - VAT and Sales Tax

Supreme Court orders fresh assessments in tax cases based on 'same goods' theory

The Supreme Court remitted the cases back to the Assessing Officer for fresh assessment due to the 'same goods' theory applied by appellate authorities ... Levy of sales tax on the supply of goods by an unincorporated association or body of individuals to its members to be deemed sales as illegal, void and ultra vires the Constitution of India. Issues involved: Remittance of cases back to Assessing Officer for fresh decision due to the 'same goods' theory applied by appellate authorities and High Courts.Detailed Analysis:The Supreme Court, comprising Mr. D.K. Jain and Mr. Anil R. Dave JJ., after hearing the counsel for both parties, decided to re-examine the issues raised in the appeals by remitting the cases back to the Assessing Officer. This decision was influenced by the verdict of the Constitution Bench in State of Karnataka versus Azad Coach Builders Private Limited and Another, which necessitated a fresh assessment. The Court noted that the appellate authorities and High Courts had based their decisions on the 'same goods' theory, which had been subsequently reviewed by the Constitution Bench. Consequently, the Court disposed of the appeals and directed the concerned Assessing Officers to make fresh assessment orders for the relevant assessment years. The Assessing Authority was instructed to complete the fresh assessments promptly, within a maximum period of four months from the date of receiving the order. Additionally, the Assessing Officer was prohibited from taking any coercive measures to recover additional demands resulting from the fresh assessments for a month following the communication of the assessment order. Both parties were granted the opportunity to present additional evidence and raise all available legal grounds during the reassessment process. The appeals were concluded with no order regarding costs.