2016 (4) TMI 533 - HC - VAT and Sales Tax

Court sets aside Assessment Orders under CST and TNGST Acts, grants plea for reconsideration, and directs reassessment.

M/s. Kamalan Engineering Co. Versus The Deputy Commercial Tax Officer, (Redesignated As Commercial Tax Officer)

The Court set aside the Assessment Orders challenged by the petitioner under CST and TNGST Acts, regarding higher tax rates on sales to Government ... Levy of penalty u/s 12(3)(b) in TNGST Act and CST Act - Respondent levied higher rate of tax on sale made to Government Department and also levied penalty u/s 12(3)(b) as the same were not covered by Certificate. Similarly, in CST Assessment Order, the respondent levied higher rate of tax on inter-state sale instead of concessional rate of tax, levied tax on transit sale instead of exemption and also levied maximum penalty u/s 9(2-A) of CST Act r/w Sec.12(3)(b) of TNGST Act as the same were not covered by statutory declaration forms - Held that:- the levy of the penalty, made by the respondent, is set aside. Seeking grant of concessional rate of tax - Sales made to State Transport Corporation - Opportunity of personal hearing not provided - Petitioner submitted that it is willing to pay 25% of the demand, in each case, made by the respondent - Held that:- Since the petitioner was not given an opportunity of personal hearing and could not produce the 'C' and 'E' forms before the respondent, in the interest of justice, the impugned orders dated 29.09.2006 and 05.10.2006 are set aside on condition that the petitioner paying 25% of the demand, made by the petitioner, in each case. The respondent is directed to decide the matter afresh, after taking note of the duplicate 'C' and 'E' forms, to be produced by the petitioner and also after affording due opportunity of personal hearing to the petitioner. The petitioner is directed to produce duplicate Forms 'C' and 'E' within a period of two weeks from the date of making the payment of 25% of demand, in each case, made by the respondent. - Writ petitions disposed of Issues:1. Higher rate of tax levied on sales made to Government Department2. Penalty imposed under CST and TNGST Acts3. Levy of higher rate of tax on inter-state sale4. Levying tax on transit sale instead of exemption5. Opportunity of personal hearing not provided6. Request for reconsideration based on duplicate forms7. Offer to pay 25% of the demand in each case8. Setting aside the penalty9. Conditions for setting aside impugned orders10. Requirement to produce duplicate 'C' and 'E' formsAnalysis:1. The petitioner challenged the Assessment Orders for the year 2004-2005 under CST and TNGST Acts, citing higher tax rates on sales to Government Departments and penalties imposed for non-compliance with certificate requirements. The petitioner sought revision based on original/duplicate C forms and C & E 1 forms to avail concessional rates and exemptions on sales to the State Transport Corporation.2. The petitioner, upon receiving the Assessment Orders, submitted declaration forms to the respondent for reconsideration. Subsequently, notices demanding tax arrears were issued, leading to the petitioner's plea for a personal hearing. The petitioner's counsel argued for a fresh decision considering the duplicate forms and offered to pay 25% of the demanded amount in each case.3. The respondent, represented by the Additional Government Pleader, agreed to set aside the erroneously levied penalties. Both parties proposed the petitioner paying 25% of the demand within a specified period for the orders to be reconsidered, with the respondent providing a personal hearing opportunity.4. The Court, acknowledging the lack of a personal hearing and the petitioner's inability to produce certain forms, set aside the impugned orders on the condition of the petitioner paying 25% of the demand in each case within four weeks. The respondent was directed to reassess the matter, considering the duplicate forms and granting a personal hearing to the petitioner. The petitioner was instructed to produce the required forms within two weeks of the partial payment.5. Consequently, the Court disposed of both writ petitions without costs, emphasizing the need for compliance with the specified conditions for setting aside the impugned orders and closing the connected Miscellaneous Petitions.