Clear turnover correlation is essential in CST and TNVAT assessments; unclear demand computation led to quashing and remand.

Assessments for the relevant years were held unsustainable because the turnover computation did not clearly correlate sales under the CST and TNVAT regimes. The document notes that export turnover is zero-rated, inter-State sales fall outside TNVAT levy, and disputed transactions must be assessed under the proper statutory machinery only after a clear, intelligible tabulation of demand. Because the assessment orders lacked coherent reasoning and worked figures, they were quashed and remitted for fresh determination after hearing the assessee. The subsidy amount appropriated against the disputed demand was directed to be returned only if the assessee succeeds in the remand proceedings, making the refund contingent on the reassessment outcome.

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Issues: (i) Whether the assessment orders for the assessment years 2009-10 to 2011-12 were liable to be quashed for want of clarity and proper correlation of the turnover between the CST and TNVAT regimes, leading to a remand for fresh assessment; (ii) Whether the subsidy amount appropriated towards the alleged tax liability was liable to be refunded, subject to the outcome of the remand proceedings.

Issue (i): Whether the assessment orders for the assessment years 2009-10 to 2011-12 were liable to be quashed for want of clarity and proper correlation of the turnover between the CST and TNVAT regimes, leading to a remand for fresh assessment.

Analysis: The impugned assessments arose from alleged variance between the figures in the annual performance report and the returns filed under the Central Sales Tax regime. The assessment had to distinguish between export turnover, inter-State stock transfers, and intra-State sales, because the tax consequences differed under the Central Sales Tax Act and the Tamil Nadu Value Added Tax Act. The order found that exports are zero-rated and are not taxable under the TNVAT framework, that inter-State sales are similarly outside the TNVAT levy, and that where export exemption is denied or inter-State movement is not proved, the proper machinery for assessment under the TNVAT Act must be invoked. The impugned orders were found to lack a clear tabulation and intelligible explanation of how the demand was worked out, rendering them arbitrary and unintelligible.

Conclusion: The assessment orders were quashed and the matters were remitted to the assessing authority for fresh orders after hearing the petitioner.

Issue (ii): Whether the subsidy amount appropriated towards the alleged tax liability was liable to be refunded, subject to the outcome of the remand proceedings.

Analysis: The amount appropriated under the governmental order had been earmarked against the disputed tax demand. The order recognised that the petitioner had ceased operations in the State and directed that the amount should be returned if the petitioner ultimately succeeds in the remand proceedings. The relief was therefore linked to the result of the fresh assessment and not granted as an unconditional refund.

Conclusion: The refund direction was made conditional on the petitioner succeeding in the remand proceedings.

Final Conclusion: The main tax assessments were set aside and sent back for fresh determination, while the monetary relief relating to the appropriated subsidy was made contingent on the outcome of the reassessment.

Ratio Decidendi: A tax assessment that fails to clearly and coherently correlate the taxable turnover with the applicable statutory regime is liable to be quashed and remitted for fresh adjudication, especially where the demand depends on distinguishing between exports, inter-State transactions, and local sales.

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