2022 (3) TMI 858 - HC - VAT and Sales Tax

Assessment order quashed, fresh assessment directed with strict compliance to judgments

The Court quashed the assessment order dated 23.11.2016 and directed a fresh assessment, emphasizing compliance with relevant judgments. The Assessing ... Validity of assessment order - jurisdictional error or not - levy of VAT - transfer of property in goods involved in execution of works contract - HELD THAT:- It is well settled in law that transactions under the CST Act ‘C’ forms which were provided by the purchaser (NEEPCO) ought to be deleted from the taxable turnover under the TVAT Act. In other words, all transactions under the CST Act ought to have been deleted apart from deletion as directed by the Hon’ble Supreme Court in the Builders Association case [1989 (3) TMI 356 - SUPREME COURT] Therefore, this Court is of the considered view that there is no further necessity to go into the arguments advanced by the learned counsel of both sides and accordingly, quash the assessment order dated 23.11.2016 passed in the present matter and remit the matter back to the Assessing Authority with further directions to pass fresh orders of assessment strictly complying with the directions issued by the Hon’ble Supreme Court in the Builders Association case (supra) as well as in the judgment rendered by a Division Bench of this Court in Projects and Services Centre case [1990 (11) TMI 358 - GAUHATI HIGH COURT] The petitioner are directed to appear before the Assessing Authority on 04.04.2022 along with a copy of this order and the Assessing Authority is directed to conclude the fresh assessment proceedings within a period of six months from the date of the first appearance of the partiespetition disposed off. Issues:Challenge to assessment order dated 23.11.2016 on jurisdictional error and VAT tax levy on goods already subjected to Central Sales Tax.Analysis:The petitioner sought a writ to quash the assessment order dated 23.11.2016 due to jurisdictional error and to prevent the levy of VAT tax on goods already taxed under Central Sales Tax. The petitioner relied on a Gauhati High Court judgment stating that sales tax laws on goods involved in works contracts are subject to Article 286 restrictions. The State argued that VAT on works contracts is lawful under the Tripura Value Added Tax Act, 2004, even for goods from interstate sales. The Court noted that transactions under the CST Act should be excluded from the taxable turnover under the TVAT Act, aligning with the Builders Association case. Consequently, the Court quashed the assessment order and directed a fresh assessment, emphasizing compliance with the Supreme Court's directives and the Gauhati High Court judgment. The Assessing Authority was instructed to conclude the reassessment within six months, ensuring strict adherence to the cited judgments. The demand notice was annulled following the assessment order's quashing. The writ petition was allowed, and pending applications were disposed of accordingly.