Madras High Court
The Gingee Agriculture Producers vs The Commercial Tax Officer [Fac on 20 January, 2021
W.A.No.143 of 2021
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 20.01.2021
CORAM :
The Honourable Mr.Justice T.S.SIVAGNANAM
and
The Honourable Ms.Justice R.N.MANJULA
W.A.No.143 of 2021
and
C.M.P.No.728 of 2021
The Gingee Agriculture Producers,
Co-operative Marketing Society Ltd (E.1564),
Rep. by its General Manager - S.Ravi,
No.1, Subbu Street,
Sirukadambur, Gingee - 604 202,
Villupuram District. ...Appellant
Vs
The Commercial Tax Officer [FAC],
Gingee, Villupuram District. ...Respondent
PRAYER: Writ Appeal filed under Clause 15 of Letters Patent to set aside
the order passed by this Court in W.P.No.22798 of 2015 dated 13.10.2020.
For Appellant: Mrs.R.Hemalatha
For Respondent: Mr.Md.Shaffiq
Special Government Pleader
1/10
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W.A.No.143 of 2021
JUDGMENT
(Delivered by T.S.Sivagnanam,J)
We have heard Mrs.R.Hemalatha, learned counsel for the
appellant and Mr.Mohammed Shaffiq, learned Special Government Pleader
appearing on behalf of the respondent.
2. This appeal filed by the appellant is directed against the order
passed by this Court in W.P.No.22798 of 2015 dated 13.10.2020. The order
impugned in the said writ petition was an assessment order dated
09.10.2014 relevant to the assessment year 2012-13 under the provisions of
the Tamil Nadu Value Added Tax Act, 2006 (hereinafter referred to as
'TNVAT Act').
3. The assessment for the relevant year was completed by the
Assessing Officer vide order dated 16.05.2013. After nearly one year, the
Assessing Officer issued notice dated 30.04.2014 under Section 84 of the
TNVAT Act stating that the claim for exemption made by the appellant-
Society in respect of tea dust, soap and hand made matches, supplied to the
Public Distribution System, is a wrong claim. The appellant sent a reply
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W.A.No.143 of 2021
dated 20.05.2014 stating that the goods which have been supplied for public
distribution are exempted from tax in terms of various Government orders
and particularly referred to the proceedings of the Government dated
05.03.2007. The Assessing Officer, after referring to the reply given by the
assessee to the notice issued under Section 84 of the Act, rejected the same
stating that the liability to pay tax on the aforesaid three commodities under
the TNVAT Act is a statutory liability under every point of sale and the
Government letter which has been brought to the notice of the officer by the
appellant is not relevant and does not mention about the exemption of the
three commodities. Accordingly, the Assessing Officer proceeded to
redetermine the total turn over at 150% arbitrarily.
4. The appellant filed petition under Section 84 of the Act dated
12.09.2014 stating that they are a co-operative society, they purchase goods
meant for public distribution and distribute to various ration shops in and
around Gingee and for the sales, they do not collect tax for those goods, but
while purchasing the goods, in terms of the directions issued by the
Registrar of Co-operative Societies, tax is remitted. Further, the appellant
stated that the sales to ration shops are exempt and therefore, they do not
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W.A.No.143 of 2021
collect tax for such sales. The appellant referred to G.O.P.No.272 Revenue
dated 11.02.1967, wherein exemption was granted for hand made matches
under the provisions of the erstwhile Tamil Nadu General Sales Tax Act,
1959. Subsequently, after the TNVAT Act enacted, the goods were included
as exempted goods under Entry 43 of Part B of Fourth Schedule of the
TNVAT Act. Therefore, the appellant contended that sale of khadi soaps and
matches are exempted, which has been wrongly assessed by the Assessing
Officer and there is an error apparent on the face of record, which is
rectifiable under Section 84 of the TNVAT Act. The appellant also referred
to Entry 36 of Part B of Fourth Schedule of the TNVAT Act, which states
that goods covered by public distribution system except kerosene are
exempted from payment of tax. Further, the appellant referred to a circular
issued by the Registrar of Co-operative Societies in Circular No.22/2008
dated 15.07.2008, which states that products like tea, edible tea, groundnut
oil, sunflower oil, sun drop, gold winner, S.V.S, gingelly oil and coconut oil
and soaps meant for public distribution system are exempted from tax,
according to Entry 36 of Part B of the Fourth Schedule of the TNVAT Act
and rectified the assessment dated 09.06.2014. The Assessing Officer, after
referring to the grounds raised in the petition filed by the appellant dated
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W.A.No.143 of 2021
12.09.2014, rejected the same on the ground that the power under Section
84 can be invoked only for correction of clerical and arithmetical mistakes
alone and therefore, the petition is not maintainable.
5. The appellant filed the writ petition challenging the order dated
09.10.2014. The prayer sought for in the writ petition was opposed by the
respondent by filing a counter affidavit. The learned Writ Court by the
impugned order has dismissed the writ petition, on the ground of
availability of statutory appeal remedy and that the appellant did not avail
such remedy within the period of limitation stipulated under the Act.
6. After elaborately hearing the learned counsel for the parties, we
find that there is a primordial mistake committed by the Assessing Officer
by invoking Section 84 of the Act for reopening the assessment.
Mr.Mohammed Shaffiq, learned Special Government Pleader appearing for
the respondent is right in his submission that power to reopen assessment is
traceable to Section 27 of the TNVAT Act. It is the further submission of the
learned Special Government Pleader that at best making a reference to
Section 84 of the Act in the show cause notice dated 30.04.2014 can be
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W.A.No.143 of 2021
treated as quoting a wrong provision and if the goods sold by the appellant-
Society to the fair price shops are exigible to tax, then there is an error in the
assessment, which needs to be rectified. Under normal circumstances, we
would have laboured on this issue, but the facts of the present case
precludes us from doing so. It is not as if the Assessing Officer was not
aware of what was the scope of his power under Section 84 of the Act as
could be seen from the order dated 09.10.2014, wherein he states that the
power can be exercised only for correction of clerical and arithmetical
mistakes. Therefore, we are not inclined to accept the submission that
referring to Section 84 in the show cause notice dated 30.04.2014 was
quoting a wrong provision of the Act.
7. In any event, if the assessment has to be reopened, it requires to
be done in terms of Section 27(1) of the Act. The Assessing Officer is bound
to disclose as to under which Sub-Section, he proposes to bring the case of
the dealer for assessing the turn over on the ground that the sale has escaped
assessment or the dealer has been assessed at a lower rate than the rate at
which it is assessable. A plain reading of the show cause notice dated
30.04.2014 will clearly show that there is no such proposal made by the
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W.A.No.143 of 2021
Assessing Officer assuming the Assessing Officer invoked his power under
Section 27(1) of the Act. Furthermore, the Assessing Officer, while taking
note of the objections raised by the appellant dated 20.05.2014, has not
given any reasons as to why the Government letter referred to by the
appellant is not relevant to the appellant's case. One more opportunity was
available to the Assessing Officer to pass a speaking order, when the
appellant filed an application under Section 84, dated 12.09.2014. However,
the Assessing Officer did not go into the correctness of the claim made by
the appellant by referring to G.O.P.No.272, Revenue dated 11.02.1967,
which was issued when the erstwhile Tamil Nadu General Sales Tax Act was
invoked and the Entry 43 of Part B of Fourth Schedule of the TNVAT Act.
Therefore, we are of the considered view that reopening of the assessment is
bad in law. If we are to approve the stand taken by the Assessing Officer in
the order dated 09.10.2014 and hold that the power under Section 84 of the
Act is to correct only arithmetical and clerical mistakes, then we have to
consequently hold that the reopening of the assessment invoking Section 84
of the Act vide notice dated 30.04.2014 and the consequential revised
assessment order dated 09.06.2014, as illegal. Therefore, considering the
case in both ways, the Revenue cannot succeed.
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W.A.No.143 of 2021
8. The learned counsel for the appellant has referred to a decision
in the case of M/s.Sujana towers Limited vs The Assistant Commissioner
(CT) in W.P.No.30304 of 2014 dated 20.11.2014. In the said decision, the
learned Single Bench of this Court had considered the scope of Section 84
of the Act and observed that the power under Section 84 can be invoked to
correct errors, more particularly, when records were never called for and
those records were anterior to the pre-assessment notice and the reply given
by the dealer was not considered.
9. Thus, for the above reasons, we are inclined to allow the appeal
and interfere with the order passed by the Assessing Officer. Accordingly,
the Writ Appeal is allowed and the order passed in the writ petition is set
aside. Consequently, the orders passed by the respondent dated 09.06.2014
and 09.10.2014 are quashed. No costs. Connected miscellaneous petition is
closed.
(T.S.S.,J.) (R.N.M.,J.)
20.01.2021
Index: Yes/No
Internet:Yes/No
Speaking Judgment/Non speaking Judgment
hvk
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W.A.No.143 of 2021
To
The Commercial Tax Officer [FAC],
Gingee, Villupuram District.
https://www.mhc.tn.gov.in/judis/
W.A.No.143 of 2021
T.S.SIVAGNANAM,J
AND
R.N.MANJULA,J
hvk
W.A.No.143 of 2021
and
C.M.P.No.728 of 2021
20.01.2021
https://www.mhc.tn.gov.in/judis/
