2018 (10) TMI 1364 - HC - VAT and Sales Tax

Court dismisses writ petitions, allows appeal filing in 30 days, restrains respondent, no opinion on merits.

M/s. Renault Nissan Automotive India Pvt. Ltd. Versus The Deputy Commissioner-II (FAC)

M/s. Renault Nissan Automotive India Pvt. Ltd. Versus The Deputy Commissioner-II (FAC) - TMI Issues Involved:1. Jurisdiction of the Assessing Authority under Section 27 of the Tamil Nadu Value Added Tax Act.2. Alleged violation of principles of natural justice.3. Classification of disputed sales under Section 3(a) or Section 3(b) of the Central Sales Tax Act, 1956.4. Maintainability of writ petitions without exhausting statutory appellate remedies.Detailed Analysis:1. Jurisdiction of the Assessing Authority under Section 27 of the Tamil Nadu Value Added Tax Act:The petitioner contended that the Assessing Authority could only reopen the assessment if there was escapement of turnover. The petitioner argued that the amount shown in the invoice was the actual amount received, thus no amount had escaped assessment. The Revenue countered that if the disputed sale fell under Section 3(a) of the CST Act, the petitioner was liable to pay tax on the value at which the goods were sold by their marketing companies to their dealers, not the value on which the petitioner paid tax. The court found that the nature of the disputed sale, whether under Section 3(a) or Section 3(b), was a factual question requiring consideration of documents and the manner of sale. The court held that the respondent had jurisdiction under Section 27 to reopen the assessment to determine if the turnover had escaped assessment.2. Alleged Violation of Principles of Natural Justice:The petitioner argued that the pre-assessment notice demanded tax payment, indicating pre-judgment. However, the court noted that the notice also invited objections, making it a proposal rather than a demand. The petitioner participated in the assessment proceedings, filing objections and attending personal hearings. The court found no violation of principles of natural justice as the petitioner was aware of the issues and had opportunities to present their case.3. Classification of Disputed Sales under Section 3(a) or Section 3(b) of the Central Sales Tax Act, 1956:The petitioner claimed the sales were under Section 3(b), involving transfer of documents during interstate movement, thus qualifying for exemption under Section 6(2)(b). The Revenue argued that the sales fell under Section 3(a) as the goods were delivered directly to the customers of the marketing companies, making it the first sale. The court held that determining whether the sales fell under Section 3(a) or 3(b) required factual examination, which was within the jurisdiction of the Assessing Authority. The court did not express a view on the merits, leaving it to the appellate authority to decide.4. Maintainability of Writ Petitions Without Exhausting Statutory Appellate Remedies:The court emphasized that in fiscal matters, aggrieved parties should first exhaust statutory appellate remedies before approaching the court. Exceptions include lack of jurisdiction, violation of principles of natural justice, or errors apparent on the face of the order. The court found that the petitioner had not shown such exceptions. The court held that the writ petitions were not maintainable as the petitioner had an effective alternative remedy of appeal. The court granted liberty to the petitioner to file a statutory appeal within 30 days, directing the appellate authority to consider the appeal on merits and restraining the respondent from taking coercive steps until the appeal was filed.Conclusion:The court dismissed the writ petitions, granting liberty to the petitioner to file a statutory appeal within 30 days and directing the appellate authority to consider the appeal on merits. The court also restrained the respondent from taking coercive steps against the petitioner until the appeal was filed. The court did not express any view on the merits of the assessment.