THE HON'BLE MR.JUSTICE S.MANIKUMAR AND THE HONOURABLE MRS.JUSTICE V.BHAVANI SUBBAROYAN Writ Appeal Nos.1157 and 1158 of 2017 C.M.P.Nos.16111 to 16113 of 2017 M/s.Madras Hotel Ashoka (P) Ltd., Rep., by the Director, Mr.K.Roshan Ballal ... Appellant in both appeals vs.
The Assistant Commissioner (CT), Egmore II Assessment Circle, 8, Mayor Ramanathan Circle, Chennai-31. ... Respondent in both appeals Writ Appeal is filed under Clause 15 of Letters Patent, against the order, dated 09.11.2016, made in W.P.Nos.2290 and 2291 of 2014.
For Appellants : Mr.C.Venkataraman
JUDGMENT
(Judgment of the Court was delivered by S.MANIKUMAR, J) Challenge in this Writ Appeal is to an order, made in W.P.Nos.2290 and 2291 of 2014, dated 09.11.2016, by which, Writ Court partly allowed the writ petitions, by setting aside the orders, dated 24.12.2013, rejecting the appellant's application, under Section 84 of the Act and the matters were remanded to the respondent for fresh consideration and while reconsidering the appellant's application for rectification of error, dated 13.12.2013, the respondent should afford an opportunity of personal hearing and after considering the matter in its entirety, pass a speaking order on merits and in accordance with law, on the two issues, which have been pointed out by the appellant, viz., with regard to the error in inclusion of the purchase turnover, which has been exempted and with regard to the sale of assets.
2. Short facts leading to filing of the appeals, are as follows:
The appellants are hoteliers, engaged in the business of supply of food and drinks to customers and registered dealer, on the file of the respondent, under the provisions of the Tamil Nadu Value Added Tax, 2006 (In short "TNVATAct"). For the assessment years 2008-09 and 2009-10, the appellants filed returns and after verifying the same, show cause notices have been issued. Thereafter, on 29.1.2013, assessments orders have been passed for the years 2008-09 and 2009-
10 respectively. Thereafter, the appellants have filed rectification petitions, under Section 84 of the TNVATAct, requesting the respondent to rectify the errors apparent on the face of record. On 24.12.2013, the respondent declined to rectify, on the ground that the revision of assessment has been made, on the basis of the details, available in the returns and additional details furnished in the objection letter, filed to the pre-assessment notice and therefore, the applications, seeking revision of assessment order, under Section 84 of the Act, is not capable of compliance.
3. The appellants have challenged the orders of assessment for the years 2008-2009 and 2009-2010 respectfully, in W.P.Nos.2290 and 2291 of 2014. However, in the writ petitions, they confined only to two issues, viz., purchase turnover, in which, tax has been levied under Section 12 of the Act and sale of assets. Insofar as the other issues, viz., TDS, Works Contract, etc., are concerned, the appellant has filed an appeal before the Appellate Authority and the appeal at the time of hearing of the writ petitions was stated to be pending.
4. Upon reading of the assessment orders, more particularly, the findings rendered in paragraph 22/23 is concerned, the writ Court found that the Assessing Officer has accepted the stand taken by the appellant in their objections, for exempted sales (liquor sales) and also levy of tax under Section 12 and dropped the proposal and thus, appellant in their objections for exempted sales (liquor sales) and exemption to the tune of Rs.71,69;3401 - for the assessment year 2008-09 and Rs.70,70,8751 - for the assessment year 2009-2010, was granted in favour of the appellant.
5. Before the writ Court, it was the case of the appellants that though the above finding was recorded by the Assessing Officer in the assessment orders, while computing the tax in paragraph 24/25 of the assessment orders, the purchase turnover taxable under Section 12 has been included and according to them, it is an error apparent on the face of the record and inconsistent with the finding recorded by the Assessing Officer, in the assessment orders.
6. With regard to the demand of tax at the rate of 12.5% on the ground of sale of assets is concerned, the appellants' case before the writ Court was that the figures under Assets Deletion in the fixed assets schedule to the Balance Sheet pertains to cost of asset sold in the books of accounts and not the sale value. Copies of records were furnished at the time of hearing. According to them, while completing the assessment, the assessing officer has brushed aside the records and erroneously rendered a finding that these are the income earned by the dealer in the course of hotel business.
7. Therefore, the main case of the appellant before the writ Court was that since the finding rendered by the Assessing Officer on the above two issues, was an error apparent, on the face of the record, they have filed applications, under Section 84 of the Act, for rectification of the mistake. However, the respondent, vide orders, dated 24.12.2013, has rejected the applications, under Section 84 of the Act, by an non-speaking order, stating that the assessment has been completed on the basis of the details available in the returns and also the additional details furnished in the objections filed by the petitioner. Therefore, the appellants have sought to quash the findings of the Assessing Officer, on these two issues, by setting aside the assessment on the above two heads.
8. Before the writ Court, the respondent has filed a counter, contending inter alia that the appellants have not filed any documents and details relating to the exempted sale to prove that the sales are eligible for exemption, for which, the writ Court has observed that the averment in paragraph 9 of the counter affidavit is wholly inconsistent with the finding recorded in the assessment orders, wherein, the benefit of exemption has been extended to the petitioner. Therefore, the writ Court observed that the counter affidavit has been filed, is without proper application of mind.
9. After hearing both the parties and materials on record, vide order, dated 29.01.2014, the writ Court ordered as follows:
"5.Coming to exercise of power under Section 84 of the Act, the language employed in the said provision confers power on the Assessing Authority or an Appellate or Revising Authority including the Appellate Tribunal at any time within five years from the date of any order passed by it, rectify any error apparent on the face of the record. Thus, if the dealer is able to point out the errors which are apparent on the face of the record, then obviously the Authority can exercise its powers. However, in case where the Assessing Authority refused to exercise power, he should spell out the reason as to how he is of the prima facie view that there is no error apparent on the face of the record. In the instant case, the said finding is lacking as the order dated 24.12.2013 is devoid of reasons. Hence, to that extent, this Court is inclined to interfere In the orders passed by the respondent.
6.Accordingly, the writ petition is partly allowed and the order dated 24.12.2013 rejecting the petitioner's application under Section 84 of the Act is set aside and the matter is remanded to the respondent for fresh consideration. The respondent shall reconsider the petitioner's application for rectification of error dated 13.12.2013, afford an opportunity of personal hearing and after considering the matter in its entirety, pass a speaking order on merits and in accordance with law on the two issues which have been pointed out by the petitioner, namely, with regard to the error in inclusion of the purchase turnover which has been exempted and with regard to the sale of assets."
10. Being aggrieved by the order passed by the Writ Court, the present appeal has been filed, on the following grounds, "(1) The Writ Court erred in setting aside the order dated 24.12.13 of the respondent which is the order rejecting the application for rectification, when the order impugned in the writ petition was the assessment order dated 29.11.13 only and not the order dated 24.12.13.
(2) Writ petitions were filed challenging the assessment order on the ground of violation of principles of natural justice, absence of jurisdiction and ultra vires the powers of the respondent, insofar as the said order levied purchase tax once again under section 12 of the TNVAT ACT and also levied tax on the turnover relating to "amenities and other collections" which had suffered service tax under the Finance Act, 1994, and not the order dated 24.12.13 rejecting the application for rectification, and hence, the order of the writ Court requires reconsideration.
(3) The appellant had paid purchase tax under section 12 along with the monthly returns and the explanation was also accepted by the respondent while passing the assessment order and hence the respondent was not justified in levying purchase tax on the said turnover by adding the said turnover to the taxable turnover reported by the appellants for the assessment year, which plea had not been disputed by the respondent in the counter affidavit, and hence, writ petition ought to have been allowed by setting aside the impugned levy.
(4) Levy of purchase tax twice on the same turnover amounts to double taxation and prohibited by TNVAT ACT and in any view, there is no provision in the TNVAT ACT that empowered the respondent to levy tax twice on the same transaction and hence the impugned levy was without jurisdiction, invalid and illegal.
(5) Their contention that the purchase tax was already paid along with the monthly returns was not denied by the respondent in the counter affidavit and hence, writ Court ought to have allowed the writ petition by setting aside the levy of purchase tax.
(6) The amenities and collection charges had suffered service tax under the Finance Act and hence it was not open to the respondent to levy sales tax on the same transaction as per the principles stated by the Supreme Court in 145 STC 1 (Bharat Sanchar Nigam limited vs. Union of India), which plea was not considered by the respondent in the counter affidavit and hence the contention ought to have been accepted by the writ Court.
(7) TNVAT Act conferred power on the respondent to levy tax on a transaction of sale or purchase only and not on any transaction which yielded income and which had also suffered service tax under the Finance Act, and hence the impugned levy is without jurisdiction.
(8) Appellant had not raised any plea before the Court, disputing the levy of tax on the turnover relating to sale of assets in the affidavit filed in support of the writ petition.
(9) Writ Court found that the averment in paragraph 9 of the counter affidavit was wholly inconsistent with the finding recorded in the assessment order and hence the counter affidavit was filed without proper application of mind, ought to have allowed the writ petition.
(10) After filing the writ petition,they had filed appeal disputing the levy of tax on other items of turnover which formed part of the assessment order, but were not disputed in the writ petition. The appeal has been admitted and pending consideration, before the jurisdictional appellate deputy commissioner. Disposal of the writ petition by the writ Court without setting aside the assessment order dated 29.11.13 has rendered the appellant without any remedy in so far as the turnovers disputed in the writ petitions are concerned."
11. Though the challenge in the writ petitions, pertains to assessment orders, dated 29.11.2013, for the years 2008-09 and 2009- 10, respectively, the fact remains that the appellant has filed rectification petitions, under Section 84 of the TNVAT Act, 2006 and orders have been passed on such rectification petition, by the assessing authority on 24.12.2013, in which event, the assessment orders, for the abovesaid years, dated 29.11.2013, would merge with the rectification orders, dated 24.12.2013.
12. When orders on the rectification petitions have been passed on 24.12.2013, it is not known, as to why, the appellant has not chosen to challenge the rectification orders, dated 24.12.2013, in the writ petitions, filed on 13.02.2017. At this juncture, it is also relevant to extract Paragraph 9 from the affidavit filed to W.P.Nos.2290 and 2291 of 2014, as follows:
"9. I state that after receipt of the impugned order, the petitioners had filed a petition for rectification under Section 84 of the TNVAT Act, requesting the respondent to rectify the errors apparent on the face of the record. I state that the respondent had passed order, dated 24.12.2013, received on 24.12.2013, stating that revision of assessment, under Section 84 was not capable of compliance as the revision of assessment was made on the basis of the details available in the returns and also the additional details furnished in the objection letter filed to the pre-assessment notice."
13. Though several grounds have been raised, challenging the common order, made in W.P.Nos.2290 and 2291 of 2014, praying to set aside the assessment orders, dated 29.11.2013, this Court is not inclined to accept the same, for the reason that while setting aside the orders passed in the rectification petitions, filed under Section 84 of the TNVAT Act, 2006, the writ Court, has directed the matter to be considered afresh and to pass speaking orders, under purchase turnover, which according to the appellant, has been erroneously included by the Assistant Commissioner (CT), Egmore II Assessment Circle, Chennai, respondent herein.
14. Grievance of the appellant is that there was an error in the assessment orders, with regard to the inclusion of purchase turnover. Addressing the issue, the writ Court has rightly set aside the order passed in the rectification petition, dated 24.12.2013 and directed the Assessing Officer to examine the matter afresh. When orders have been passed in the rectification petitions, setting aside the same, with the above directions, the contention of the appellant that the writ Court should have set aside the assessment orders, dated 29.11.2013 also, cannot be accepted.
15. From the grounds, it could be deduced that the appellant requires this Court to do the exercise, as to whether, inclusion of purchase turnover in the assessment for years 2008-09 and 2009-10 respectively, is correct or not, which exercise has been directed to be done by the assessing officer.
S. MANIKUMAR, J.
AND
V.BHAVANI SUBBAROYAN, J.
skm
16. In the result, the Writ Appeals are dismissed. No costs.
Consequently, connected Miscellaneous Petition is also closed.
Index: Yes Internet: Yes skm
To The Assistant Commissioner (CT), Egmore II Assessment Circle, 8, Mayor Ramanathan Circle, Chennai-31.
(S.M.K., J.) (V.B.S., J.) 22.09.2017 Writ Appeal Nos.1157 and 1158 of 2017