2019 (7) TMI 1991 - HC - VAT and Sales Tax

Court stresses timely assessments under TNGST, excludes rubber sales from turnover.

Kanthimathy Estate Versus The Assistant Commissioner of Commercial Taxes

The court found the delay in completing assessments under the Tamilnadu General Sales Tax Act unacceptable, noting a significant time lapse between ... Inordinate delay in conclusion of proceedings - Impugned order passed after a lapse of 15 years - HELD THAT:- A dealer is required to statutorily maintain and preserve books of accounts and all documents connected and ancillary to its business only for a period of five years from the date on which the assessment relating to that year had become final. In the present case, the periods of assessment stretch from 1989-1990 to 1994-1995. The pre-assessment notices have been sent only on 23.08.1999 and proceedings completed in 2015. Thus even on this score, the time taken for conclusion of proceedings appears inordinately delayed and is thus unacceptable. The impugned orders are quashed. Petition allowed. Issues:1. Delay in completion of assessments under the Tamilnadu General Sales Tax Act.2. Interpretation of turnover under Section 2(r) of TNGST.Issue 1: The judgment challenges the delay in completing assessments under the Tamilnadu General Sales Tax Act. The court notes that pre-assessment notices were issued in 1999 for the periods 1989-1990 to 1993-1994, with final orders passed only in 2015. The court emphasizes the need for a reasonable period for assessments, citing a Supreme Court judgment regarding the Punjab Sales Tax Act, which highlighted the importance of timely assessments. The court also refers to the statutory requirement for dealers to maintain books of accounts for five years from the finalization of assessments, as per Sections 40(2)(a) and 40(2)(b) of the TNGST Act. Since the assessments in question spanned from 1989-1990 to 1994-1995, the court deems the delay in concluding the proceedings unacceptable and quashes the impugned orders.Issue 2: The judgment also addresses the interpretation of turnover under Section 2(r) of the TNGST Act. The court refers to the definition of turnover, which excludes consideration from the sale of rubber for the levy of sales tax. By analyzing the statutory definition provided in Section 2(r), the court concludes that the consideration from the sale of rubber is excluded from turnover for sales tax purposes. Consequently, the writ petitions challenging the assessments are allowed without costs, and connected miscellaneous petitions are closed.