Court sets aside assessment order on Wind Mill disposal value, remands for fresh review, quashes penalty levy.

The court set aside the assessment order regarding Wind Mill disposal value and remanded the matter for fresh consideration by the respondent, directing a reassessment based on legal principles outlined in a previous judgment. The court quashed the penalty levy, emphasizing the need for proper reassessment considering legal precedents. The respondent was directed to redo the assessment in line with the court's directions, and the writ petition was allowed without costs, with connected petitions closed.

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Issues:
Challenge to assessment order under TNVAT Act for the assessment year 2013-14 based on discrepancies in the sale of Wind Mill and tax assessment at 5%.

Analysis:
The petitioner, a registered dealer under TNVAT Act, challenged an assessment order dated 17.05.2016 regarding the sale of Wind Electrical Energy to Tamil Nadu Electricity Board. The respondent alleged discrepancies in the sale of Wind Mill during 2013-14, not disclosed in returns, proposing tax assessment at 5% on the sale value. The petitioner claimed the sale as a 'slump sale' and objected to the tax levy, citing a Business Transfer Agreement dated 24.03.2014 transferring the Wind Division to another company.

The petitioner submitted objections, emphasizing the 'slump sale' nature of the transaction and referenced a clarification stating no Stamp Duty was leviable on Wind Mills. Despite the petitioner's contentions and supporting documents, the respondent rejected the claims, citing lack of proof of Wind Mill disposal. The court noted the misdirection by the Assessing Officer in not considering the Business Transfer Agreement comprehensively, which indicated a transfer of the entire establishment.

Referring to a previous judgment involving a similar issue, the court highlighted the importance of determining whether a business was sold as a division or as a whole. The court emphasized that even the transfer of one line of business, like the windmill division, could amount to a transfer of the business as a whole. The court set aside the assessment order regarding Wind Mill disposal value and remanded the matter for fresh consideration by the respondent, directing a reassessment based on the legal principles outlined in the previous judgment.

The court quashed the penalty levy, emphasizing the need for a proper reassessment considering the legal precedents. The respondent was directed to redo the assessment in line with the court's directions, and the writ petition was allowed without costs, with connected petitions closed.

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