Madras High Court
The State Of Tamil Nadu vs Sabarigiri Industries on 12 April, 2012
Bench: Chitra Venkataraman, K.Ravichandra Baabu
IN THE HIGH COURT OF JUDICATURE AT MADRAS Dated : 12.04.2012 Coram The Honourable Mrs.Justice CHITRA VENKATARAMAN and The Honourable Mr.Justice K.RAVICHANDRA BAABU TC(R). No. 2360 of 2008 The State of Tamil Nadu rep. by the Deputy Commissioner (CT) Vellore Division Vellore ... Petitioner -vs- Sabarigiri Industries No. 27, Kumbakonam Road Panruti ... Respondent Tax Case Revision to revise the order of the Tamil Nadu Sales Tax Appellate Tribunal (Main Bench), Chennai dated 15.12.2000 in T.A.No. 874/99 & C.O.P.No. 871/99. For Petitioner : Mr.R.Sivaraman, Special Government Pleader (Taxes) ORDER
(Order of the Court was made by CHITRA VENKATARAMAN,J) The above Tax Case Revision is at the instance of the Revenue against the order passed by the Tamil Nadu Sales Tax Appellate Tribunal (Main Bench), Chennai for the assessment year 1996-97. The questions raised in the above Tax Case Revision is as follows:-
" (i)Whether as against the order of rectification, an appeal would lie to the Appellate Assistant Commissioner? and
(ii) Whether for ascertaining the rate of tax under Additional Sales Tax, the turnover for the year has to be taken and the appropriate rate of tax has to be adopted for levy of additional sales tax on the turnover upto 31.7.96?"
2. As far as the first issue on the rectification order is concerned, a perusal of the order of rectification by the Assessing Authority shows that the assessment under the Tamil Nadu additional sales tax was rectified for the purpose of applying the correct rate of additional tax on the taxable turnover for the period from 1.4.96 to 31.7.97. The Officer viewed that the taxable turnover for the period from 1.4.96 to 16.7.96 was wrongly assessed at 1.5% as against 2% tax leviable. Thus, referring to the letter of the Special Commissioner and Commissioner of Commercial Tax, dated 6.1.1998, the Assessing Officer held that when the taxable turnover for the period from 1.4.1996 to 31.7.1996 exceeded Rs.1 crore but was below Rs.5 crores, additional sales tax was to be levied without making any deduction of basic exemption of the first Rs.10 lakhs turnover at 2%. Accordingly, the order of rectification was made under Section 55. Hence, revision was made as against this order.
3. The assessee went on appeal before the Appellate Assistant Commissioner. The Appellate Assistant Commissioner, following the decision of this Court reported in 102 STC 613 STATE OF TAMIL NADU v. SUBBU CHEMICALS, held that since the order passed by the Assessing Officer under Section 55 of the Act is not the one made under any of those enumerated provisions for which appeal remedy was available under Section 31 of the Act, no appeal would lie as against the order passed by the Assessing Authority.
4. The assessee went on further appeal before the Sales Tax Appellate Tribunal, who allowed the appeal, holding that the order passed on rectification was not a rejection order on an assessee's application, but it had gone into the merits of the assessment. Thus the Tribunal held that the order was an appealable order.
5. As regards the merits of the liability as to the rate of tax applicable for the period from 1.4.96 to 31.7.96, the Tribunal agreed with the contention of the assessee and held that the rate of tax is only 1.5% for the period from 1.4.96 upto 31.7.96. The Tribunal pointed out that even though the Assessing Officer had passed a rectification order again fixing the rate at 2%, the correct rate would nevertheless be at 1.5% only. Thus the Tribunal allowed the appeal. Aggrieved by the order of the Tribunal, the Revenue is on revision before this Court.
6. As far as the first issue on the maintainability of the appeal is concerned, in the decision reported in 39 STC 260 STATE OF TAMIL NADU v.CROMPTON ENGG. CO., this Court held that there is a clear and a real distinction between an order allowing an application for rectification and thereby rectifying or modifying the original order of assessment and an order rejecting an application for rectification. When the rectification proceedings resulted in a positive action, which has the effect of destroying the finality of original assessment, thereby reopening the assessment order itself, then the provisions relating to appeal would lie. On the other hand, when the Assessing Officer refuses to interfere with the original order and that order is allowed to remain intact, the said order would not be amenable normally to appeal remedy. In so holding, this Court referred to the provisions under Section 55(4) of the Tamil Nadu General Sales Tax Act, 1959, inserted by Amendment Act No. 31 of 1972, providing for appeal and revision remedy when an order of rectification is made, and not when the authority concerned refuses to pass an order of rectification.
7. Similar view was also taken in the decision of this Court reported in 114 STC 359 STATE OF TAMIL NADU v. SPEEDLINE AGENCIES. This Court, in paragraph 5 of the judgment, pointed out as follows:-
"Any order made by an authority declining to correct any alleged errors has the effect of leaving the original order intact. It is only when rectification is ordered, and as consequence, one of the parties is aggrieved by such modification, a remedy is required to be provided. For that purpose Section 55(4) of the Act has been introduced. That new sub-section (4) of Section 55 does not confer a right on an applicant who successfully seeks rectification, to file appeal or revision against the order declining to rectify. If the authority which made the original order is of the view that there are in fact no errors in the order which need to be rectified, or can be rectified under Section 55 of the Act, no further proceedings can be taken by applicant, against the refusal of the authority to make an order in favour of the person applying for rectification. "
8. In the light of the above stated decisions and in view of Section 55(4) of the Act, the first question is answered against the Revenue. Thus, as against the order of rectification passed resulting in the modification of the original order passed, the assessee has the right of appeal before the appellate forum.
9. As far as the second question is concerned, learned Special Government Pleader submits that the question is no longer res integra by reason of the decision reported in [2011] 39 VST 247 STATE OF TAMIL NADU v. NATIONAL TIME CO., wherein identical question of law has been considered. The assessment year under consideration was relating to 1996-97.
10. Applying the above stated decisions, we do not find any defect in the order of the Tribunal also. Consequently, the Tax Case Revision is dismissed. No costs.
bg To
1. The Deputy Commissioner (CT) Vellore Division, Vellore
2. The Tamil Nadu Sales Tax Appellate Tribunal (Main Bench), Chennai