AI Drafter 
TaxTMI 
TaxTMI 
2019 (11) TMI 423
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....f assessment in terms of Section 12C of the Tamil Nadu General Sales Tax Act 1959 (in short 'TNGST Act') bearing in mind the transitional period between the phasing out of the TNGST Act and the coming into force of the Tamil Nadu Value Added Tax Act, 2006 (in short, 'TNVAT Act'). The spirit and intendment of Section 12C appears to be in recognition of the fact that a finality has to be arrived at in regard to assessments for the periods prior to 01.04.2006. (The TNVAT Act came into force from and with effect from 01.01.2007). Thus, an expedited and simplified procedure for assessment was put in place for completion of assessments prior to the aforesaid date, i.e., 01.04.2006 (in short 'effective date'). 3. Section 12C provided that assessments for the periods prior to the effective date shall be completed by the Assessing Authority during the period 01.04.2006 to 31.03.2007 on the basis of the returns filed by the petitioner and upon consideration of certain pre-conditions and compliances that were fastened upon the parties in terms of Section 12C as well as Rule 15(5-E) of the Tamil Nadu General Sales Tax Rules (in short 'Rules'). 4. The provisions of Section....
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....or last year of business. (7) In case where the total turnover under the Act exceeds fifty lakhs of rupees, the dealer shall file his annual return only after it is duly audited and certified by a Chartered Accountant or a Cost Accountant.' 5. The Commissioner, Commercial Taxes issued a Circular setting out very specific criteria for the purposes of assessment and guidelines for completion of the same. The Circular is extracted below: VAT CELL Circular NO:12/2007 Office of the Commissioner of (VAT Cell No.26401/2007) Commercial Taxes, Chepauk, Chennai 600 005. Dated: 23.07.2007 C I R C U L A R SUB: Tamil Nadu General Sales Tax Act, 1959 - Deemed Assessment - Introduction of Section 12-C - Certain guidelines issued - Regarding. REF: Commissioner of Commercial Taxes Circular No.23/2006, dated 27.12.2006 and subsequent circular issued. Inspite of instructions issued in the circular cited, it has been brought to the notice of the Commissioner of Commercial Taxes that some of the assessing officers are insisting the production of accounts relating the finalisation of assessment for the years upto 2005-2006. In this....
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....eriods prior to 01.04.2006, the procedure being specifically set out in the applicable Rule and the Circular extracted above. W.P.Nos.18254 and 18255 of 2008: 7. Two orders of assessment are impugned before me both dated 28.03.2008 for the periods 2004-05 and 2005-06. 8. Heard Mr.Senniappan, learned counsel for the petitioner and Mr.Haribabu, learned Additional Government Pleader for the respondent. 9. The petitioner is a contractor and a dealer in terms of the provisions of the Tamil Nadu General Sales Tax Act, 1959 on the files of the respondent/Assessing Officer. As far as both assessment years are concerned, the petitioner had availed of the scheme of assessment under Section 12 C. Notice dated 02.03.2007 had been issued though served on the assessee/petitioner on 11.05.2007. The petitioner objected to the preassessment process on 21.05.2007 relying both on the expedited process of assessment set out under Section 12 C and seeking a personal hearing prior to conclusion of assessment proceedings. The orders of assessment had been passed on 28.03.2008 after a period of ten months (approx.) from filing of reply by the petitioner. No personal hearing as sought for wa....
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....fore the dealer are not eligible to be assessed under section 12 (C) of the Act.' 13. The Assessing Authority thus proceeds on the basis that there has been suppression of tax by the dealer noticed at the time of visit by the Enforcement Department Officials on 27.07.2005. The officials are stated to have noticed that the supply of 'clean room equipments' was taken to be a works contract and brought to tax at the rate of 4%, whereas, according to the Department, the transaction comprised of sale of equipment which would be taxable at the rate of 20%. Thus, according to the revenue, there was suppression of more than Rs. 25,000/-, in this case and in the light of the condition in clause (5) of Rule 15 (5-E), that excludes cases where the dealer has suppressed tax liability in excess of Rs. 25,000/-, the petitioner was not entitled to the benefit of the scheme. 14. I am prima facie of the view that the question of suppression does not merely mean a difference in the interpretation of law vis-a-vis the petitioner and the respondent. In the present case, it is a legal dispute as to whether the transaction in question constitutes works contract, taxable at 4% or sale o....
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....oduction of books of accounts subject to the satisfaction of the conditions stated therein. This indicates that an order under Section 12C will have to be passed in cases where an assessee satisfies all the prevalent conditions even if proceedings for assessment have been initiated in respect of the periods in question. After all, the clarificatory circular issued by the Special Commissioner makes it clear that the purpose of Section 12 C and the corresponding Rule is to bring to an end proceedings for assessment as expeditiously as possible, if the officer is prima facie satisfied with the return and the exemptions sought by the assessee, subject to the conditions stipulated in the Rule. 21. Thus I hold that an assessment under Section 12 C must be framed even in respect of periods where there has been exchange of communication by way of pre-assessment notice, objections as well as personal hearing afforded to the petitioner prior to 01.04.2006, such proceedings pending completion as on 01.04.2006. The impugned orders of assessment though dated 27.02.2007 do not refer to the provisions of Section 12 C at all. 22. Admittedly, in these cases the assessee has only invoked the a....
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....t and the goods having moved from within the State to outside by reason of the contract of sale. Counsel relied on two decisions of the Punjab and Haryana High Court in the case of Mehta Group of Industries V. State of Haryana (75 S.T.C.428) and Haryana Iron & Steel Rolling Mills V. State of Haryana (77 S.T.C.211). 2. The Appellate Authority, as also the Tribunal, after examining all the facts placed before them, have found that the assessee was maintaining branch offices outside the State, that the goods had been sent to the branch office and that the branch office had delivered the goods to the customers. It has found that the goods viz., electrical lamps were standardised goods, and were not articles manufactured to the specifications of the customer. It has also been found by the Tribunal that the fact that there was high demand for the goods of the assessee was the reason for the coincidence of the quantity moved to the branch office corresponding to the quantity delivered from the branch office to the customers. The Tribunal has also held that the invoices that had been prepared in the assessee's factory were subsequent to the preparation of the invoice at the br....
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....s prima facie discharged the burden cast upon it to establish that the transactions in question constitute branch transfers and nothing further. The Assessing Authority has, on the other hand, not conclusively established suppression in order to take the present assessment out of the ambit of Section 12 C. I may, in this connection, also cite a judgement of the Supreme Court in the case of Union of India V. Chaturbhai M. Patel & Co. ((1976) 1 SCC 747), wherein the Bench holds that in order to establish fraud, whether in civil or criminal proceedings, the authority alleging such fraud should establish the same beyond reasonable doubt. Equally so, for an allegation of suppression. 29. In the light of the observations made above, I am inclined to set aside the impugned orders as well as show cause notice. The respondent is at liberty to pass a deemed assessment in terms of Section 12 C within a period of two (2) weeks from the date of receipt of a copy of this order. It is also made specifically clear that the respondent is at liberty to initiate proceedings for re-assessment in terms of Section 16 of the Act, in accordance with the applicable timelines and in accordance with law. ....
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.... of the Notification which exempts turnover from sales of cotton yarn manufactured by Mills situated in Tamil Nadu to registered exporters subject to the condition that the mills shall produce proof of export by the exporter is extracted below: '130. Exemption on the sales of cotton yarn manufactured by the mills in Tamil Nadu on the sales of cotton yarn manufactured by them to registered exporters subject to the condition that the mills shall produce proof of exports before the final check of their accounts for the year concerned to the satisfaction of the assessing authority concerned. (G.O. No.2398, Revenue, dated 27.07.1970) (Notn.No.197(a) of 1970), dated 27.07.1970) (Gazette Notn. Dated 28.07.1970)' 36. The Notification supports the claim of exemption and has been applied in the assessments of the petitioner for previous and subsequent years. While this is so, the Assessing Authority refers to a Clarification issued by the Special Commissioner and Commissioner of Commercial Taxes dated 29.11.2006 which, according to him, stipulates that if the cotton yarn purchased is converted into cloth, then the benefit of G.O.No.197 dated 27.07.1990 is not ava....