AI Structured Summary
Not yet generated for this judgment
Judgment
S. Manikumar, J.—The petitioner has sought a Writ of Certiorari, to quash the impugned order of the first respondent in
TNGST/0340624/2004-05 dated 30.10.2006.
Brief facts leading to the Writ Petition are as follows:
The petitioner is a registered dealer on the file of the first respondent, dealing with stationery, printing ribbon and printing ink etc. According to
them, they effected local sales against Form XVII declaration and resale covered u/s 3-H of the Tamil Nadu General Sales Tax Act (hereinafter
referred to as ""the Act"") and they filed monthly returns and complied with Section 3-H of the Act. The petitioner also filed Form XVII, wherever
they claimed concessional rate of tax in respect of their sales u/s 3(3) of the Act. While that be the position, the first respondent issued a notice
dated 05.10.2006, proposing to levy higher rate of tax at 10% in respect of resale turnover by stating that the petitioner have not furnished
purchase list at the time of check of accounts and failed to furnish A9 returns for every month for claiming resale concessional rate of tax and
thereby, disallowed the resale tax at 1% covered u/s 3-H of the Act and proposed to assess the same at the higher rate of tax at 10%.
The petitioner has further submitted that when the assessing officer proposed to levy higher rate of tax for non-filing of Form XVII declaration,
on receipt of the notice dated 15.10.2006, the petitioner requested for extension of time and also pointed out that their claim of 1% under resale
tax turnover is in order, inasmuch as, they have filed all the details and produced A9 register. When the petitioner bonafidely believed that the first
respondent would accept the levy of tax at 1% on the resale turnover, to their shock and surprise, the first respondent has confirmed the proposal
to levy tax at 10% on the resale turnover of Rs. 3.03.47,300/- instead of 1% and issued proceedings for recovery of balance of tax amount.
The petitioner has further submitted that aggrieved by the assessment order, they have filed an application dated 02.02.2007 u/s 55 of the Act
to rectify the errors and contended that they have already filed form A9 register, along with all the details of purchases and filing of Form A9
returns for every month is not mandatory in order to claim the concessional rate of tax at 1% over the resale turnover. In the said application, the
petitioner also pointed out that they have filed Form XVII declaration in respect of certain turnover. The petitioner has further submitted that the
first respondent having accepted the XVII Declaration, and allowed concessional rate of tax at 3% u/s 3(3) of the Act in respect of claim of resale
at 1%, has merely rejected the claim of rectification u/s 55 of the Act. Aggrieved by the same, the petitioner filed revision petition before the
Deputy Commissioner (CT) (RP) (North), Chennai, the second respondent herein, u/s 33 of the Act. The said revision petition was returned by
the second respondent stating that there is no provision to give direction to the assessing officer to revise the assessment order u/s 33 of the Act
and therefore, directed the petitioner to file an appeal against the assessment order before the concerned appellate authority, Therefore, the
petitioner has filed the present Writ Petition challenging the order of assessment dated 30.10.2006.
Mr. Inbarajan, learned Counsel for the petitioner submitted that the impugned order of assessment is liable to be set aside on the ground of
violation of principles of natural justice, as no notice served on the petitioner before passing the impugned order of assessment. He further
submitted that as per Section 3-H of the TNGST Act, it is not mandatory that A9 statement should be submitted for each and every month, for
claiming exemption of second and subsequent sales. He further submitted that having verified the purchase register, along with Form A9 register,
which contained all the details relating to local purchase from the registered dealers, for which, the petitioner have claimed resale tax u/s 3-H of the
Act, the first respondent has no jurisdiction to levy higher rate of tax.
Learned Counsel for the petitioner further submitted that the first respondent ought to have seen that as per Section 3-H of the Act, there cannot
be any levy of higher rate of tax and Rule 6-A of the TNGST Rules, does not contemplate filing of returns in Form A9, showing the details of the
purchases in the preceding month in respect of claim of resale taxable at 1%, He further submitted that non-consideration of A9 returns, which was
submitted by the petitioner at the time of check of accounts is an error apparent on the face of the record and in such circumstances, the first
respondent ought to have examined the application u/s 55 of the Act and rectified the order of assessment dated 30.10,2000 and non-
consideration of the petition on merits vitiates the proceedings.
On the other hand, Mr. R. Mahadevan, learned Additional Government Pleader, appearing for the State, submitted that subsequent to the order
of assessment dated 30.10.2006, the requisition of the petitioner dated 02,02.2007 for rectification u/s 55 of the Act was considered on merits
and the Commercial Tax officer, Evening Bazaar Assessment Circle, Chennai-1, the first respondent herein, has passed a detailed order dated
05.02.2007 in respect of non-filing of A9 monthly returns, but accepted Form XVII declarations filed by the dealers and allowed concessional rate
of tax at 3% u/s 3(3) of the Act. He further submitted that the revision petition filed before the Joint Commissioner (CT), Chennai, has been
returned on the ground that there is no provision to give a direction to the assessing authority u/s 33 of the TNGST Act. He further submitted that
when the assessment order dated 30.10.2006 is merged with the later order of the first respondent dated 05.02.2007 and that of the Joint
Commissioner (CT), Chennai, dated 20.04.2007, in the absence of challenge of the subsequent orders, it is not open to the petitioner to challenge
the assessment order which is no longer in existence.
Learned Additional Government; Pleader (Taxes) for the respondent submitted that the Writ Petition itself is not maintainable for non-joinder of
necessary party, viz. the Joint Commissioner (CT). Chennai (North). On merits, learned Additional Government Pleader, submitted that the
petitioner ought to have submitted Form A9 statement, each and every month as stipulated under Rule 19B(1) of the TNGST Rules, which
provides, that every dealer other than a casual trader in any of the goods specified in the (First, Second, Fifth, Sixth and Eleventh Schedules) to the
Act, whose total turnover in a year exceeds Rs. 3,00,000/- and every other dealer, who claims exemption on a turnover for the year shall submit
so as to reach the assessing authority on or before the last day of the calendar month a return in Form A9 in duplicate showing the details of the
purchases or sales in the preceding month in respect of which he has claimed exemption. He also submitted that when the statute completes a thing
to be done in a particular manner, the same should be done in the specified manner and not otherwise. Therefore, he prayed that the Writ Petition
should be dismissed both on merits as well as for non-joinder of parties.
Heard the learned Counsel appearing for the parties and perused the materials available on record.
For the assessment year 2004-05, the petitioner has submitted their monthly returns in Form A1. On the basis of the returns, the assessing
officer confirmed the proposal and determined their total and taxable turnover at Rs. 4,72,80,397/- and Rs. 4,72,09,972/- respectively and further
proposed to disallow the claim of resale at 1% on the turnover of Rs. 3,03,47,300/-. He also proposed to assess the same at 10%, treating it as
first sales in the hands of the dealers, on the ground that neither a purchase list was produced at the time of check of accounts nor Form A9 returns
were filed every month, for the claim of resale tax. It is evident from the assessment order that a notice was issued to the assessee calling for their
objections. But the petitioner did not file any objections and therefore, the proposals were confirmed in toto in the proceedings dated 30.01.2006.
Therefore, the first contention of the petitioner that the impugned order dated 30.10.2006 is in violation of the principles of natural justice, as
sufficient opportunity was not given to the petitioner to file their objection, is not tenable. Moreover, Form XVII, purchase list and Form A9 return,
for the assessment year 2004-05 were filed by the assessee only after the original order of assessment and that too, after nearly two months, along
with the petition u/s 55 of the TNGST Act. The assessment order does not indicate that the petitioner has sought time for production of Form
XVII or Form A9 returns in response to the pre-assessment notice issued to the dealers.
Section 3-H of the TNGST Act, deals with the levy of resale tax, which reads as follows:
Notwithstanding, anything contained in (Sub-Section (1) and (2) of the Section 3, Section 3-A or 3-B) every dealer, other than the dealer liable to
pay tax u/s 3J, whose total turnover is not less than ten lakhs of rupees for the year, shall pay a resale tax at such rate not exceeding one percent as
may be fixed by the Government, by notification, on the turnover of resale of goods specified in the First Schedule and the Eleventh Schedule other
than the goods notified by the Government u/s 3C, at a point other than the point of levy specified therein.
Provided that any resale turnover included in the total turnover of the dealer paying tax under Sub-section (2) of Section 3D and Sections 3E, 7C,
7D and 7E is not liable for resale tax:
Provided further that the goods taxable at the point of last purchase in the State are not liable to resale tax.
Explanation:- For the purpose of this Section, the turnover of resale in respect of goods taxable at the point of first purchase means the sales
turnover of such goods at all points of sales by subsequent dealer.
Rule 19-B(1) of the TNGST Rules reads as follows:
Every dealer other than a casual trader in any of the goods specified in the (First, Second, Fifth, Sixth and Eleventh Schedules) to the Act, whose
total turnover in a year exceeds Rs. 3,00,000/- and every other deafer, who claims exemption on a turnover for the year shall submit so as to
reach the assessing authority on or before the last day of the calendar month a return in Form A9 in duplicate showing the details of the purchases
or sales in the preceding month in respect of which he has claimed exemption.
As per Rule 19-B(1) of the TNGST Rules, monthly returns in Form A9 should be submitted on or before the last day of the calendar month.
The month of purchase shall mean the month normally adopted by the dealers concerned for the purpose of accounting. To prove that the goods
purchased is a second and subsequent sale in the hands of the dealers and for availing levy of tax at 1% instead of actual rate of tax for the goods,
the dealer is bound to submit A9 returns, which is the statement of details of goods liable to tax at the first point of sale in the State, in respect of
which, exemption is claimed on the ground that the dealer is not the first seller or first purchaser, as the case may be. To be eligible to pay tax at
1% u/s 3-H of the Act, the assessee is bound to file a monthly statement in Form A9, as contemplated under Rule 19-B to prove that it is only a
second and subsequent sales in the hands of the assessee and that the goods have already suffered tax at the first stage. Section 3-H is a
substantive provision, by which, the tax is levied on resale at such rate not exceeding 1%, whose total turnover is not less than Rs. 10,00,000/- per
year. Rule 19-B of the TNGST Rules, is not against the specific provision of the Act and the manner of claiming exemption is provided under 19-B
of the Rules. The information to be furnished by way of monthly returns is to help the revenue to examine the claims of the assessee and to identify
the taxable transactions liable to tax under the Act, so that the dealer does not evade payment of tax. When the dealer is directed to act in a
particular manner as provided in the statute, the assessee has no other option except to follow the same and cannot contend that it would be open
to them to submit the returns at the end of the year for claiming concessional levy of tax at 1% on resale turnover.
It is well settled that in Taylor v. Taylor reported in 1875 (1) Cha. D. 426, Ramchandra Keshav Adke (Dead) by Lrs. and Others Vs. Govind
Joti Chavare and Others, , B. Chandrasekaran v. State of Tamil Nadu reported in 2001 (3) CTC 353 and S. Ramasamy v. V. Ranganayaki and 5
Ors. reported in 1999(1) LW 382, that if the statute contemplates a specific thing to be done in a specified manner, it should be done in that
manner and not otherwise. Therefore, the contention of the petitioner that furnishing of Form A9, showing the details of purchase in the preceding
month, for claiming resale at 1% is not mandatory, is liable to be rejected.
It is evident from the proceedings enclosed in the typed set of papers that the original order of assessment dated 30.10.2006 has been
subsequently revised by the Commercial Tax Officer, the first respondent herein on 05.02.2007. Further, the petitioner has also challenged the said
assessment order before the revisional authority, viz., the Joint Commissioner (CT), Chennai (North). When the original assessment order dated
30.10.2006, is merged with the later order dated 05.02.2007, the petitioner ought to have challenged only the later order dated 05.02.2007 or the
order passed by the Joint Commissioner (CT), Chennai North in this Writ Petition. However, merely because the petitioner has not followed the
procedure as contemplated in Rule 19(B) of the TNGST Rules that by itself would not extricate the revisional authority from his statutory
obligation to consider the revision petition on merits, to find out whether the petitioner is liable to pay tax as proposed by the Department.
Therefore, it is open to the petitioner to represent the revision petition before the revisonal authority to adjudicate the matter on merits afresh and
that the revisional authority is directed to consider the petition on merits and pass orders in accordance with law within four weeks from the date of
receipt of a copy of this order.
In the above directions, the Writ Petition is disposed of. No costs. Consequently, connected Miscellaneous Petition is closed.