2018 (1) TMI 291 - HC - VAT and Sales Tax

Dismissal of Tax Case Revision Petition Emphasizes Compliance with Statutory Provisions

The Tax Case Revision Petition was dismissed, with the court ruling against the revision petitioner on all issues. The judgment emphasized the ... Works contract - hardware chemicals - rate of tax - Whether the order of the Appellate Assistant Commissioner in allowing the appeal, setting aside the revision made by the Assessing Officer is legally correct or not? - Held that: - Though Mr.K.Venkatesh, learned Government Advocate, made submissions, and sought for reversal of the orders, passed by the Appellate Assistant Commissioner (CT)-I, Chennai, and confirmed by the Tribunal, considering the facts and circumstances of the case, we do not find that the appellant has made out a case, for reversal - Revenue has not produced any contrary decision - Tax Case Revision Petition is dismissed. Issues:1. Assessment under the scheme of self-assessment at 4% on a turnover of Rs. 16,46,510 for the year 2000-2001.2. Dispute regarding exercising the option to pay tax at compounded rate under Section 7 C of the Act.3. Applicability of compounding rate of tax for works contract under Section 7(2) from 1/7/2000.4. Allegation of denial of natural justice in assessment proceedings.Issue 1: Assessment under the scheme of self-assessmentThe respondent, a dealer in hardware chemicals, was assessed at 4% on a turnover of Rs. 16,46,510 under the scheme of self-assessment for the year 2000-2001. The Assessing Authority assessed 70% of the turnover of the works contract receipt and allowed the dealer to deduct 30% for labor and other charges under Section 3 B of the Act. The dealer was found ineligible for the compounded rate of tax under Section 7 C as they had not exercised the option to pay tax at 4% at any time before the financial year commenced.Issue 2: Dispute regarding exercising the option under Section 7 CThe dealer appealed against the revision of assessment, arguing that they had not executed any works contract in the previous assessment year 1999-2000, hence not required to exercise the option along with the first monthly return for the year 2000-2001. The Appellate Assistant Commissioner allowed the appeal based on this contention, citing a judgment and the dealer's compliance with the provisions.Issue 3: Applicability of compounding rate of tax for works contractThe State filed an appeal against the order of the Appellate Assistant Commissioner, contending that the compounding rate of tax for works contracts under Section 7(2) was applicable from 1/7/2000 and not just for the assessment year 2000-2001. The Tribunal upheld the Appellate Assistant Commissioner's decision, emphasizing the dealer's compliance with the provisions and the lack of contrary decisions by the Revenue.Issue 4: Allegation of denial of natural justiceThe Assessing Authority proposed to assess the entire works contract receipt at 11% under Section 3(2) for lack of details, records, and documents. However, after verification and objections by the dealer, the assessment was passed at 11% under Section 3 B, stating the dealer had not exercised the option for the compounded rate of tax. The Tribunal found this reasoning flawed, noting a violation of natural justice principles and set aside the revision of assessment for the year 2000-2001, restoring the original assessment.In conclusion, the Tax Case Revision Petition was dismissed, with the substantial questions of law answered against the revision petitioner. The judgment highlighted the importance of compliance with statutory provisions and the application of relevant legal principles in tax assessment matters.