Garware Marine Industries Ltd. vs The Tamil Nadu Taxation Special Tribunal and The Tahsildar, Govt. Dues Recovery Department

The petitioner is engaged in the manfacture of PVC floats, Monofilament and knitted fabrics. It has its Head Office at Mumbai and branches at

different places including the one at Chennai.

In respect of the returns filed for the Assessment Year 1994-95, the petitioner claimed exemption on the turnover relating to the sale of Fish

Knitted Fabrics. The second respondent herein, the Commercial Tax Officer, Chennai, rejected the plea of the assessee for exemption and levied

tax and penalty, by his order dated 28.6.1996.

The petitioner herein challenged this before the Tamil Nadu Taxation Special Tribunal in O.P. No. 1619 of 1996. By order dated 5.3.1998, the

Tamil Nadu Taxation Special Tribunal dismissed the petition on the ground of availability of an alternative remedy by way of an appeal before the

Appellate Assistant commissioner.

The petitioner states that the Tribunal, however, did not extend the time for filing the statutory appeal. Since nearly three years had lapsed after

the passing of the assessment order, the assessee could not file an appeal under the provisions of the Act. Hence, it invoked the power of the

second respondent u/s 55 of the Tamil Nadu General Sales Tax Act, 1959, for rectification of the assessment order. In its petition dated

19.1.1999, the petitioner placed reliance on the circular of the Special Commissioner dated 16.9.1995 in L. Dis. 147755/85 and the decision of

the Bombay High Court reported in Sainet Private Ltd. and Another Vs. Union of India (UOI) and Another, that the fish knitted fabrics is exempt

under the Third Schedule to the Tamil Nadu General Sales Tax Act, 1959. By order dated 22.10.2002, the second respondent rejected the

rectification petition on the ground that in the absence of any appeal preferred, the order of assessment could not be reviewed.

A revision was preferred as against this before the Deputy Commissioner, who, once again dismissed the same; thereby upheld the order of the

second respondent. The petitioner preferred a further revision to the Joint Commissioner of Commercial Tax. In the meantime, recovery

proceedings were taken against the petitioner on the amount due as per the demand raised under the assessment order. It is stated that since there

is no power for the Joint Commissioner for granting stay u/s 35 of the Tamil Nadu General Sales Tax Act, 1959, the petitioner approached this

Court for quashing the order of the Special Tribunal in O.P. No. 1619 of 1996 dated 5.3.1998 and to direct the second respondent to consider

the claim for exemption in the light of the law laid down by the Apex Court in the decision reported in Nylon Net Manufacturing Company Vs.

Addl. Sales Tax Officer and Others, . Learned Counsel appearing for the petitioner submitted that the Tribunal erred in its view in directing the

petitioner to avail of an appeal remedy without giving any direction as regards the exclusion of time spent in prosecuting the proceedings before the

Special Tribunal. She also pointed out that the authorities below erred in overlooking the circular issued which clearly exempts the fish knit

manufactured.

Learned Counsel appearing for the petitioner further pointed out that considering the kind of the order passed by the Special Tribunal, the only

remedy available to the petitioner was to prefer a petition u/s 55. In the face of the peculiar circumstances, learned Counsel submits that the order

passed by the Tribunal merits to be set aside.

We do not find any justification to interfere with the order of the Tribunal, which correctly took the view that in view of the alternative remedy

available, the original petition could not be taken up by the Tribunal. It is a matter of fact that the assessee did not seek any further clarification

from the Tribunal to exclude the time taken for filing the original petition to enable the assessee to prefer an appeal before the appellate authority.

Having regard to the fact that the assessee had gone before the authority concerned invoking the remedy u/s 55 of the Tamil Nadu General Sales

Tax Act, 1959, and thereafter, as against the order of rejection, preferred a revision before the Deputy Commissioner and an appeal against the

order of the Joint Commissioner, we do not find any justification to interfere with the order of the Tribunal to hold it otherwise. However, having

regard to the fact that the revision petition is still pending before the Joint Commissioner of Commercial Tax, the demand now sought to be made

by invoking the recovery proceedings shall stand stayed till the disposal of the revision petition before the Joint Commissioner. The assessee is at

liberty to work out his remedy, having regard to the revision petition, which shall be finally disposed of by the Joint Commissioner, expeditiously.

The writ petition is accordingly dismissed. No costs. Connected W.P.M.P. No. 17428 of 2005 is also dismissed.