2017 (10) TMI 1165 - HC - VAT and Sales Tax

Court allows Writ Petition challenging sales tax order, directs application review within 8 weeks

M/s. Computer Graphics Limited. Versus The Joint Commissioner (CT), The Commercial Tax Officer

The court allowed the Writ Petition, set aside the impugned order rejecting the application under the Tamil Nadu Sales Tax Settlement of Arrears Act, ... Rejection of application filed under Samadhan Scheme - case of petitioner is that such order was not intimated to the petitioner, and only when the petitioner received a notice from the second respondent, dated 18.09.2017, demanding tax, interest and penalty for the year 1992-1993 under TNGST Act, they came to know that their application filed under Samadhan Scheme has been rejected - Held that: - similar issue decided in the case of Nippon Enterprises (South) Vs. The Joint Commissioner (CT) Chennai and another) [2015 (4) TMI 1209 - MADRAS HIGH COURT], where it was held that once the superior authority (Appellate Deputy Commissioner) passes an order, such order is binding on the lower authority (Assessing Officer) who function under the jurisdiction of such superior authority and the order of the Tribunal is binding upon the Appellate Deputy Commissioner and the Assessing Officer who function under the jurisdiction of the Tribunal - first respondent is directed to entertain the Application filed by the petitioner under Samadhan Scheme and pass necessary orders in accordance with law - petition allowed. Issues Involved:1. Challenge to the rejection of the application under the Tamil Nadu Sales Tax Settlement of Arrears Act, 2010.2. Delay in challenging the impugned order.3. Similarity with the case of Nippon Enterprises.4. Legal position on the binding nature of appellate orders on lower authorities.5. The applicability of the original assessment order when appeals are pending.Detailed Analysis:1. Challenge to the Rejection of the Application under the Tamil Nadu Sales Tax Settlement of Arrears Act, 2010:The petitioner challenged the order passed by the first respondent rejecting their application under the Tamil Nadu Sales Tax Settlement of Arrears Act, 2010 (Samadhan Scheme). The impugned order dated 03.11.2014 was not communicated to the petitioner until they received a notice from the second respondent on 18.09.2017 demanding tax, interest, and penalty for the year 1992-1993 under the TNGST Act. The petitioner then obtained a certified copy of the order and filed this Writ Petition.2. Delay in Challenging the Impugned Order:The court accepted the petitioner's explanation for the delay in challenging the impugned order, noting that the petitioner was not informed of the order until much later. The court also considered that a similar case involving the petitioner's sister concern, Nippon Enterprises, had been decided favorably, and thus, the delay was excusable.3. Similarity with the Case of Nippon Enterprises:The court acknowledged that the issue was squarely covered by the decision in the case of Nippon Enterprises (South) Vs. The Joint Commissioner (CT) Chennai and another, where a similar rejection of the application for settlement was set aside. The reasons for rejection in the present case were identical to those in the Nippon Enterprises case.4. Legal Position on the Binding Nature of Appellate Orders on Lower Authorities:The court reiterated the legal principle that orders of appellate authorities are binding on lower authorities, citing the Supreme Court's decision in Union of India v. Kamlakshi Finance Corpn. Ltd. The court emphasized that the mere pendency of an appeal does not justify disregarding the appellate order unless it has been stayed or set aside.5. The Applicability of the Original Assessment Order When Appeals Are Pending:The court found that the respondents' reason for rejecting the application—that the original assessment order should be considered due to pending appeals—was not sustainable. The court clarified that once the Appellate Deputy Commissioner has passed an order, it supersedes the original assessment order, unless stayed or set aside by the Tribunal.Conclusion:The court allowed the Writ Petition, set aside the impugned order, and directed the first respondent to entertain the petitioner's application under the Samadhan Scheme and pass necessary orders in accordance with the law within eight weeks. The court made it clear that this order would not affect the pending appeal proceedings before the Tribunal, and the respondents could proceed afresh if they succeed in the appeal. No costs were awarded, and the connected miscellaneous petition was closed.