2018 (4) TMI 586 - HC - VAT and Sales Tax

Court directs petitioner to appeal to Appellate Authority in tax assessment challenge. Interim order with financial condition.

TJSV Steel Fabrication and Galvanising (India) Ltd. Formerly known as M/s. TJSV Petroleum Ltd. Versus The Assistant Commissioner (CT)

TJSV Steel Fabrication and Galvanising (India) Ltd. Formerly known as M/s. TJSV Petroleum Ltd. Versus The Assistant Commissioner (CT) - TMI Issues:Challenge to assessment order for the year 2011-12 under Tamil Nadu Value Added Tax Act, 2006.Analysis:1. Previous Challenges: The petitioner previously challenged assessment orders for 2009-10 and 2010-11. The Court set aside the orders for 2010-11 due to issues like short payment of tax, incorrect Input Tax Credit, and non-payment of TDS. The matter was remanded for fresh consideration after personal hearing.2. Current Challenge - Assessment Order 2011-12: The petitioner contested the assessment order for 2011-12, claiming the Assessing Officer erred by not considering submitted judgments. The petitioner objected to a notice issued after a different stand was taken by the respondent, leading to a hasty assessment without proper opportunity for response.3. Legal Arguments: The petitioner argued that the tax demand based on the entire value of goods post-galvanizing was incorrect, citing a Supreme Court judgment limiting liability to the cost of materials transferred. The respondent's focus on the definition of 'Manufacture' under Central Excise Law was deemed inappropriate for galvanizing work.4. Taxation Issues: The petitioner protested VAT imposition on the full bill value, including service charges already under service tax. They claimed the tax rate should not exceed 4%/5% based on the nature of the components cleared post-galvanizing.5. Industrial Input Certificate: The petitioner highlighted the discretionary nature of the Industrial Input Certificate requirement and efforts to obtain certificates from clients like Bharat Heavy Electricals Ltd.6. Court's Decision: The Court declined to remand the matter to the Assessing Officer due to prior oversight of petitioner's submissions and a closed mindset. It directed the petitioner to appeal before the Appellate Authority, considering ongoing similar issues for other years. An interim protection order was granted subject to a financial condition.7. Final Order: The petitioner was instructed to pay a specified sum within six weeks for filing an appeal. The payment would enable filing the appeal without limitation rejection and stay the remaining tax demand until appeal disposal. Failure to comply would nullify the order's benefits, leaving the petitioner to pursue remedies under the Act. No costs were awarded, and the connected Writ Miscellaneous Petition was closed.