TaxTMI 
TaxTMI 
2021 (4) TMI 503
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....assed by the 2nd respondent, the petitioner had preferred an appeal before the 1st respondent which has culminated in the impugned order dated 17.05.2013. 5. In the impugned order, the 1st respondent accepted the contention of the petitioner that the freight element was not to be included into the taxable turnover as the sale took place at the premises of the petitioner and has therefore concluded that the transactions for which the petitioner had filed returns under Central Sales Tax claiming branch transfers/inter-state sale within the meaning of Section 3 of the Central Sales Tax Act, 1956 were indeed a local sale as the sale took place at the factory gate of the petitioner in Sriperumbadur. 6. Under these circumstances, the 1st respondent has passed the impugned order with the following observations:- "Levy of Tax at 2% on the turnover relating to Freight Charges in respect of inter-state sales covered by C forms to the extent of Rs. 53,91,75,180.00. In respect of the above three disputes, it is observed from the assessment order that the learned assessing officer has levied tax at 3%, 2% and 12.5% on the turnover relating to Freight charges to the extent of Rs. 12,07,33,....
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....ellants which is related to CST transactions being CTT Vs.Indian Alumnium Cable Company Limited is also not identical to the case as the case referred pertains to charging of the freight charges separately billed and not raised along with the sale bill as in the case of the appellants. The bill relating to freight expenses are not raised simultaneously and are done at later stage. Similarly in the Ram Oxygen Private Limited case, the freight bills are separately raised as supplementary bills along with other incidental expenses and hence not identical to the instant case. Further the decision rendered in the case of Tvl.Indian Rayon and Industries Limited is also not applicable as separate debit note has been raised in respect of freight charges and like the above two cases, this is also not helpful to the appellants. With regard to the decisions referred by the appellants running from 1 to 10 in page 5 of this order is not being lengthly discussed as it has been accepted that the invoice comprises certain terms and conditions that was agreed between the buyer and seller and it acts as a part of the agreement between the buyer and the seller. Now coming to the decision of the Cen....
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....ater Act. It is submitted that the power of the Appellate Authority under Section 52 (2) & (3) of the TNVAT Act, 2006 is restricted. 8. It is submitted that the 1st respondent as an Appellate Authority cannot alter the basis of tax assessed by an original authority in an Appellate Proceedings. It is submitted that his powers are circumscribed in terms of sub-clause 52(2) of the TNVAT Act 2006. 9. In this connection, a reference was made to the decision of the Hon'ble Supreme Court in the case of Commissioner of Income Tax (Central), Calcutta Vs. Rai Bahadur Hardutroy Motilal Chamaria, (1967) 66 ITR 443, wherein, while dealing with Section 31 of the Income Tax Act, 1922, the Court held as follows:- "The principle that emerges as result of the authorities of this Court is that the Appellate Assistant commissioner has no jurisdiction. Under Section 31(3) of the Act, to assess a source of income which has not been processed by the Income Tax Officer and which is not disclosed either in the returns filed by the assessee or in the beyond the subject-matter of the assessment. In other words, the power of enhancement under Section 31(3) of the Act is restricted to the subject-matte....
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....s, what he can revise is not merely the ultimate amount which is liable to tax, but he is entitled to revise the various decisions given by the Income-Tax Officer in the course of the assessment and also the various incomes or deductions which came in for consideration of the Income-Tax Officer. 12. The learned counsel for the petitioner further submitted that the decision of the Hon'ble Supreme Court in Commissioner of Income- Tax, Bombay City I, Bombay Vs. Shapoorji Pallonji Mistry, [1962] 44 ITR 891 (SC), held as under:- " 9. The question is whether we should accept the interpretation suggested by the Commissioner in preference to the one, which has held the field for nearly 37 years. In view of the provisions of Sections 34 and 33- B by which escaped income can be brought to tax, there is reason to think that the view expressed uniformly about the limits of the powers of the Appellate Assistant Commissioner to enhance the assessment has been accepted by the legislature as the true exposition of the words of the section. If it were not, one would expect that the legislature would have amended Section 31 and specified the other intention in express words. The Income Tax Ac....
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....nfer the appellate authority with a wide jurisdiction to issue an order in relation to the matter in appeal before him. This jurisdiction is not merely confined to remand, confirmation, reduction, enhancement or annulment of the assessment under appeal. 18. I have considered the arguments advanced by the learned counsel for the petitioner and the learned Government Advocate for the respondents. 19. Assessments under the Tax enactments are by and large based on the returns filed by an assessee. In the case of Tamil Nadu Value Added Tax, 2006 and the Central Sales Tax Act, 1956, it is certainly driven by the returns filed by a "dealer" unless no returns were filed. In this case the petitioner had filed returns under the provisions of the Central Sales Tax Act, 1956. 20. Section 52(3) of the Tamil Nadu Value Added Tax Act, 2006 reads as under:- 52. Appeal to Appellate Joint Commissioner: - (1) ..... (2) The appeal shall be in the prescribed form and shall be verified in the prescribed manner and shall be accompanied by such fee not exceeding one hundred rupees, as may be prescribed. (3) In disposing of an appeal, the Appellate Deputy Commissioner may, after giving the appel....
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....s of the 1st respondent as an Appellate Authority to direct the assessing officer to pass suitable order under Section 52 of the Tamil Nadu Value Added Tax Act, 2006 which provision is applicable to appeal under CST Act, 1956. This is what the 1st respondent as an Appellate Authority has done. 25. The first respondent therefore rightly concluded that the sale was concluded at the factory gates itself and therefore the freight element cannot from part of the taxable turnover as was rightly contented by the petitioner. 26. Since the sale took place at the factory gate, the sale never assumed the character of an inter-state sale. It was actually a local sale. It was therefore to be assessed as a local sale under Tamil Nadu Value Added Tax Act, 2006. 27. In my view, Section 52(2) of the said Tamil Nadu Value Added Tax Act, 2006 cannot be interpreted in such a manner that an Appellate Authority will be forced to uphold a wrong assessment. Merely because the returns were filed by treating the transaction as that of the inter-state sale cannot means such wrong, assessment has to be upheld. 28. The decision of the Hon'ble Supreme Court in the case of Commissioner of Income Tax (Cen....
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.... is a continuation of the original assessment proceeding like an appellate proceeding against a decree or order in a civil suit. Its purpose is to determine the correct tax liability of an assessee or the dealer as the case may be. An assessee is neither required to pay more or less. It is required to pay the correct tax liability. Likewise, the authority under the Act can neither dole out concession which is not available or include any amount on which no tax is payable. 32. As an Appellate Authority, the 1st respondent is required to merely examine the correctness of the order passed based on the returns filed by an assessee. Therefore, if the first respondent as an Appellate Authority, finds that the petitioner had wrongly filed return by treating a transaction as that of an inter-state when it indeed it was that of a local sale, as an Appellate Authority, the 1st respondent was well within his rights to direct the Assessing officer to complete assessment in accordance with law. 33. In the impugned order, the first respondent has not added any tax liability in the impugned order. The first respondent has merely directed the jurisdictional Assessing Officer to exercise the juri....