Tvl.Sabcol Concepts v. The Commercial Tax Officer
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 17.07.2017
CORAM
THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAM W.P.No.24761 of 2004 and W.P.M.P.No.30125 of 2004 Tvl.Sabcol Concepts, represented by its Proprietor, Mrs.Rita Sabapathy, No.646, Phase II, Satwachari, Vellore, Vellore District.
.. Petitioner Vs The Commercial Tax Officer (Vellore Rural), Office of the Commercial Tax Officer (Vellore Rural), Vellore.
.. Respondent Petition filed under Article 226 of the Constitution of India, praying to issue a Writ of Certiorari to call for the records of the respondent dated 16.08.2004 in CST No.565978/2000-2001 and quash the same.
For Petitioner : Mr.N.Muralikumaran for M/s.McGan Law Firm For Respondent : Mr.K.Venkatesh, Government Advocate
ORDER
Heard Mr.N.Muralikumaran for M/s.McGan Law Firm, appearing for the petitioner and Mr.K.Venkatesh, learned Government Advocate for the respondent.
2.The petitioner, who is a registered dealer on the file of the respondent under the provisions of the Central Sales Tax Act, 1956 ("CST Act" in short), is aggrieved by a notice issued by the respondent invoking the powers conferred under Section 55 of the Tamil Nadu General Sales Tax Act ("TNGST Act" in short), on the ground that the order of assessment passed by the assessing officer dated 31.03.2004 is without jurisdiction, as
the original order of assessment dated 31.10.2002 which was appealed against, is merged with the order passed by the Appellate Assistant Commissioner dated 25.11.2003 by which the Appellate Assistant Commissioner partly allowed the appeal and remanded the assessment back to the Assessing Officer for giving credit to the 'C' Form declarations produced by the petitioner, and partly affirming the turnover and the tax levied as 'C' Form declarations were not produced for the said turnover. Therefore, the respondent, by the impugned notice, proposed to state that the revision of assessment made by the assessing officer by accepting the 'C' Forms for the remaining turnover after the order passed by the Appellate Assistant Commissioner dated 25.11.2003 suffers from error apparent on the face of the record and therefore, he is entitled to revise the same invoking his powers under Section 55 of the TNGST Act.
3.The Hon'ble Full Bench of this Court in the case of State of Tamil Nadu v. Arulmurugan and Company (1982 Vol.51 STC 381), considered the scope and powers of the appellate authority as well as the assessing authority with regard to acceptance of 'C' Forms and whether it could be done at the appellate stage. After elaborately considering the scope and purport of Section 8(4) of the CST Act, it was pointed out that where the assessing authority is satisfied in a given case about the existence of sufficient cause to allow further time for 'C' form to be filed, it must necessarily be followed up by appropriate action such as reopening the assessment already completed. The implementation, in appropriate cases, of the power to allow further time cannot be withheld on the excuse that there is no express provision either in the statute or in the statutory rules for reopening the assessment. When the power is there and the facts are there demanding its exercise, the implementation must be done as a matter of course, on the doctrine of implied or ancillary powers.
4.In Vispro Foundry Engineers Limited v. Commercial Tax Officer, Adyar Assessment Circle, Madras, reported in 1991 Vol.81 STC 169, following the decision of the Hon'ble Full Bench of this Court in the case of State of Tamil Nadu v. Arulmurugan and Company (cited supra), it was held that the petitioner therein was entitled to seek reopening of the final assessment and the only thing that would determine whether the assessment should be reopened or not was the existence of "sufficient cause" to the satisfaction of the assessing authority. The assessing authority was however, required to consider the case and to say whether the cause in his opinion was sufficient to reopen the assessment or not. Following the decisions in the case of Arulmurugan and Company and Vispro Foundry Engineers Ltd (supra), the Commissioner of Commercial Taxes issued a Circular dated 30.04.1993 by directing the assessing officers to permit 'C', 'C1', 'C2', and 'F' forms to be filed after completion of
assessment on sufficient cause being shown. This aspect was considered by this Court in its decision in Daon Auto Parts (India) Pvt.Ltd. v. The Assistant Commissioner (CT), Sriperambudur Assessment Circle, in W.P.Nos. 34470 to 34477 of 2016 dated 29.09.2016. Thus, the legal position being well settled, the assessing officer, appellate authority or for that matter, the Tribunal is entitled to accept 'C' Forms filed belatedly provided the dealer shows sufficient cause. 5.Turning to the facts of this case, the assessment was completed by the assessing officer for the year 2000-2001 under the CST Act by which interstate sales covered by valid 'C' Form declaration was assessed to tax at 4% and the interstate sales which were not covered by valid 'C' Form declarations were assessed at 10%.
The petitioner preferred an appeal before the appellate authority and when the appeal was heard, the petitioner produced two 'C' Form declarations covering the taxable turnover of Rs.1,64,790/- and requested to direct the assessing officer to accept the same and pass fresh orders allowing concessional rate of tax on the said turnover. 6.The appellate authority allowed the appeal in part and remanded the matter to permit the petitioner to file the Form 'C' declarations for the said turnover of Rs.1,64,790/- and directed the assessing officer to pass fresh orders after verification of the Form 'C' declaration, and the remaining part of the assessment orders was sustained.
It appears that after the order was passed, the petitioner was able to secure some more 'C' forms and produced the same periodically before the assessing officer which has been given credit to in respect of the relevant turnover and assessed the petitioner to lesser rate of tax by way of passing the revised assessment orders. It appears that after a new officer took charge as assessing officer of the petitioner, the impugned notice has been issued. 7.Two aspects arise for consideration, firstly as to whether the respondent could have invoked the powers under Section 55 of the TNGST Act for issuing the impugned notice. If the answer to the question is in the affirmative, then the petitioner has to submit to the jurisdiction and give their reply to the impugned notice.
If the answer to this question is in the negative, then it has to be seen as to whether the Department has any other remedy under the provisions of the TNGST Act. Section 55 of the TNGST Act deals with powers to rectify any error apparent on the face of the record. This power is exercisable by the assessing authority or the appellate authority or the revisional authority within five years from the date of any order passed by it and rectify any error apparent on the face of the record.
allowed reasonable opportunity of being heard. The scope of the said Section was under considerable debate in a long line of decisions and as of now, it is a fairly well settled proposition that the scope of review is different from that of rectification as the review permits re-writing of the order for re-hearing of the case and in that, the important facts not available earlier, could be taken into account. However, in a rectification, what is that can be corrected are clerical and arithmetical errors in the original orders and such corrections can be made by what is available on record and not on account of facts not on record. What is more important is that the expression used in Section 55 is "error apparent on the face of the record".
When a question arose as to what is the error to say apparent on the face of the record, it was observed in State of Tamil Nadu v. Meenambal & Co., (1984) 56 STC 82 Madras, that error which can be rectified under Section 55 must be an error which is shown apparent on the very face of the record, and it is a wonder how the error had crept in, when it could have been avoided even in the first place. The Courts have also considered the case where errors cannot be rectified under Section 55 of the TNGST Act. To qualify for such rectification, the mistakes must be obvious, glaring, self-evident and not requiring any detailed investigation into the facts or arguments on law.
Therefore, the mistakes which will not fall within the parameters mentioned above, can only be rectified by filing an appeal or revision and this would equally apply when the matter pertains to the jurisdiction of the authority or validity of law. In certain cases, the writ Courts have entertained challenge to such orders in exercise of its powers under Article 226 of the Constitution of India. Equally well settled is the legal position that a mere change of opinion or facts even if new facts come to notice, cannot be a ground for reopening much less a case for rectification.
8.In S.H.Benson (India) Private Limited v. The State of Tamil Nadu (1972 Vol.30 STC 228), the petitioner therein was an advertising agent and he submitted returns for the year 1961-62 to 1965-66 under the provisions of the Madras General Sales Tax Act and he was assessed to tax on the returns. Subsequently the petitioner therein filed appeals for the years 1961-62 and 196263. For the other three years, viz. 1963-64 to 1965-66, the petitioner therein did not challenge the assessments, but paid the tax for the years 1961-62 and 1962-63. The Tribunal allowed the appeals of the petitioner therein and set aside the assessments. Thereupon, the petitioner therein filed an application before the appropriate authority for rectification under Section 55 of the Madras General Sales Tax Act, 1959 and Rule 5(9) of the Central Sales Tax (Madras) Rules, 1957 for rectification of the error apparent in the orders of assessment for the years 1963-64, 1964-65 and 1965-66. The authority rejected the application which was challenged under Article 226
of the Constitution of India and the Court affirmed the order passed by the authority rejecting the writ petition, pointing out that the error that is referred to in Section 55 is an error which is apparent in the order of that authority, and in the absence of no such error to be rectified, the authority was correct in rejecting the petition under Section 55 of the Act. 9.The interpretation given by the respondent and more particularly in the written instructions to the learned Special Government Pleader, by letter dated 21.10.2004, points out that the order of assessment passed by the assessing officer dated 31.10.2002 has merged with the order passed by the Appellate Assistant Commissioner dated 25.11.
2003 and therefore, there is no jurisdiction for the assessing officer to interfere with the order of assessment and therefore, it is an error which is apparent on the face of the record. Further it is submitted that it is not an escapement of turnover under Section 16 of the Act and in the absence of any patent omission resulting in loss of revenue in the original assessment, Section 32 also would not stand attracted. The ground raised by the respondent for issuing the impugned notice is essentially not an error which is apparent on the face of the record, as the error is not obvious or glaring and self-evident but it requires examination of facts and arguments on law.
10.One more aspect to be borne in mind is that the interpretation given by the authority if accepted, it would run counter to the law laid down by the Hon'ble Full Bench of this Court in State of Tamil Nadu v. Arulmurugan and Company (1982 Vol.51 STC 381), and as understood by the Commissioner of Commercial Taxes, while issuing Circulars. Thus, the reason cited in the impugned notice would not fall within the glaring, self-evident error requiring rectification and it is not an error apparent on the face of the record, but the matter where there are disputed legal questions. Therefore, the respondent is not justified in invoking Section 55 of the TNGST Act. 11.
Having answered the first question in favour of the dealer and against the revenue, it has to be seen as to what is the other remedy available to the revenue in case they are of the opinion that the revised assessment orders are prejudicial to the interest of revenue. The only power available for the Department is to invoke Section 32 of the TNGST Act, which deals with special powers of the Deputy Commissioner which gives suo motu jurisdiction to the Deputy Commissioner and the Joint Commissioner, respectively to scrutinize the orders of the assessing officer passed under various Sections subject to the conditions which are stipulated in the said provision.
12.One more provision which also would stand attracted is the special powers of the Joint Commissioner of Commercial Taxes under Section 34 and this power is exercisable subject to the condition that are contained in the said provision. 13.For the above reasons, this Court has no hesitation to hold that the impugned notice issued by the assessing officer invoking Section 55 of the TNGST Act is without jurisdiction. Accordingly, the writ petition is allowed and the impugned notice is set aside. No costs. Consequently, the connected miscellaneous petition is closed. However, it is open to the Department to proceed against the petitioner in terms of other statutory provisions available under the TNGST Act. Sd/- Assistant Registrar(CO) //True Copy// Sub Assistant Registrar KM To The Commercial Tax Officer (Vellore Rural), Office of the Commercial Tax Officer (Vellore Rural), Vellore.
+ 1 cc to M/s. Mcgan Law Firm, Advocate Sr.50349 + 1 cc to Special Government Pleader Sr.50092 W.P.No.24761 of 2004 and W.P.M.P.No.30125 of 2004 SVI(CO) EU 2.08.17