High Court grants relief in VAT Act application, orders re-examination and speaking order

The High Court partly allowed the writ petition, setting aside the order rejecting the petitioner's application under Section 84 of the Tamil Nadu Value Added Tax Act. The court directed the respondent to re-examine the application, provide a personal hearing, and issue a speaking order on the identified issues related to errors in the inclusion of exempted purchase turnover and the treatment of the sale of assets. No costs were awarded, and connected miscellaneous petitions were closed as a consequence of the judgment.

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Issues: Challenge to assessment orders for the years 2008-2009 and 2009-2010 regarding purchase turnover and sale of assets, application under Section 84 of the Tamil Nadu Value Added Tax Act for rectification of errors apparent on the face of the record.

Analysis:
1. Challenge to Assessment Orders: The petitioner, a registered dealer under the Tamil Nadu Value Added Tax Act, challenged the assessment orders for the years 2008-2009 and 2009-2010 specifically on two issues: purchase turnover taxed under Section 12 of the Act and tax levied on the sale of assets. The Assessing Officer accepted the petitioner's objections for exempted sales but included the purchase turnover taxable under Section 12, which the petitioner claimed was an error apparent on the face of the record and inconsistent with the findings in the assessment orders.

2. Tax on Sale of Assets: The petitioner disputed the tax demand at a rate of 12.5% on the sale of assets, arguing that the figures under Assets Deletion in the fixed assets schedule represented the cost of assets sold in the books, not the sale value. The petitioner filed an application under Section 84 of the Act for rectification of the alleged errors made by the Assessing Officer, contending that the Officer wrongly considered these figures as income earned in the course of the hotel business. The respondent rejected the application, stating that the assessment was based on the details available in the returns and objections filed by the petitioner.

3. Rectification under Section 84: Section 84 of the Act empowers the Assessing Authority to rectify any error apparent on the face of the record within five years from the date of the order. The court noted that if a dealer points out such errors, the authority should provide reasons if refusing to rectify them. In this case, the court found the order rejecting the petitioner's application lacked reasoning, prompting the court to intervene and set aside the order, remanding the matter to the respondent for fresh consideration.

4. Court Decision: The High Court partly allowed the writ petition, setting aside the order rejecting the petitioner's application under Section 84 of the Act. The court directed the respondent to re-examine the application, provide a personal hearing, and issue a speaking order on the identified issues related to the errors in the inclusion of exempted purchase turnover and the treatment of the sale of assets. No costs were awarded, and connected miscellaneous petitions were closed as a consequence of the judgment.

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