2021 (2) TMI 245 - HC - VAT and Sales Tax

High Court Overturns Assessment Orders, Emphasizes Correct Application of Statutory Provisions

The Gingee Agriculture Produ ers, Co-operative Marketing Society Ltd. Versus The Commercial Tax Officer [FAC], Gingee, Villupuram District.

The Gingee Agriculture Produ ers, Co-operative Marketing Society Ltd. Versus The Commercial Tax Officer [FAC], Gingee, Villupuram District. - TMI Issues:Reopening of assessment under Section 84 of the TNVAT Act for correction, Scope of power under Section 84 vs. Section 27 for assessment reopening, Correctness of Assessing Officer's actions, Availability of statutory appeal remedy and its impact on writ petition.Analysis:1. Reopening of Assessment under Section 84: The appellant challenged the order passed under the TNVAT Act for the assessment year 2012-13. The Assessing Officer invoked Section 84 to reopen the assessment, claiming the appellant's exemption claims for certain goods supplied to the Public Distribution System were incorrect. The appellant contended that the goods were exempted under various government orders and circulars. The Assessing Officer proceeded to redetermine the turnover, leading to the appellant filing a petition under Section 84 for rectification.2. Scope of Power under Section 84 vs. Section 27: The High Court analyzed the Assessing Officer's actions in invoking Section 84 for reopening the assessment. It was argued that the power to reopen assessment is actually traceable to Section 27 of the TNVAT Act, not Section 84. The court noted that the Assessing Officer was aware of the limitations of Section 84, as indicated in the order, but still proceeded with the reassessment under this section. The court emphasized that if the assessment needed to be reopened, it should be done in accordance with Section 27(1) of the Act, which requires specific disclosure by the Assessing Officer.3. Correctness of Assessing Officer's Actions: The court found that the Assessing Officer did not provide adequate reasons for rejecting the appellant's claims and did not address the relevant government orders and circulars cited by the appellant. The court highlighted that the Assessing Officer failed to pass a speaking order when the appellant raised objections and filed an application under Section 84, which could have clarified the issues. Ultimately, the court concluded that the reopening of the assessment was legally flawed.4. Statutory Appeal Remedy and Writ Petition: The respondent opposed the writ petition by citing the availability of a statutory appeal remedy, which the appellant did not utilize within the stipulated time frame. However, the court held that the Assessing Officer's actions were incorrect, and the appellant's appeal was justified. The court referred to a previous decision to support the interpretation of Section 84 and the need for correcting errors in assessments. Consequently, the court allowed the appeal, set aside the orders passed by the Assessing Officer, and quashed the revised assessment orders dated 09.06.2014 and 09.10.2014.In conclusion, the High Court's judgment focused on the correct application of statutory provisions, the Assessing Officer's obligations in reassessment, and the appellant's right to challenge the assessment through appropriate legal channels. The court's detailed analysis clarified the legal errors in the assessment process and upheld the appellant's appeal, emphasizing the importance of procedural correctness and adherence to statutory provisions in tax assessments.