This writ petition has been filed praying for a Writ of Certiorarified Mandamus, to call for and quash the Letter No.Drafting Cell 1/51872/2008, dated 7.1.2009, issued by the first respondent and quash the same and to direct the second respondent to issue the settlement certificate, under Section 8 of the Tamil Nadu Sales Tax (Settlement of Arrears) Act, 2008.
2. It has been stated that the petitioner is a manufacturer and dealer in tooth powder. The registered trade marks of his products are "Gopal Tooth Powder", "Anjol Alluppu Marundu" and "Jet Tooth Powder", registered under the Trade and Merchandise Act, 1958, having Registration No.129120, 195639 and 320132, respectively.
3. The petitioner had entered into an agreement with M/s.Muthu Agencies for a licence to use the Trade Mark. As per the agreement, the rights conferred on M/s.Muthu Agencies are limited. Therefore, there is no absolute transfer of the right to use the Trade Mark. The assessing officer, having, originally, passed orders by accepting returns, had revised the order by levying tax on the receipt of royalty charges, for the usage of trade mark, for the assessment year 1987-1988.
4. The petitioner had filed a statutory appeal before the First Appellate Authority, who had allowed the appeal, in AP.No.341/93, dated 21.10.1993. However, the Joint Commissioner (CT) (SMR) had revised the appeal order and he had restored the order of the Assessing Officer. Aggrieved by the said order of the Joint Commissioner (CT) (SMR), the petitioner had filed a Tax Case (Appeal) before the Tamil Nadu Taxation Special Tribunal, Chennai. Since the tax case was dismissed, the petitioner had filed a writ petition before this Court, in W.P.No.6870 of 2001. The said writ petition had also been dismissed by this Court, on 1.4.2004. The Review Application, in R.A.No.43/2004, had also been dismissed, by an order, dated 3.9.2008.
5. It has also been submitted that for the assessment years 1991-1992, 1994-1995 to 1999-2000, the Assessing Officer had revised the order, dated 11.2.2002, levying tax on the royalty amount received, as he did for the assessment year 1987-1988. It was challenged before the first Appellate Authority, in A.P.Nos.14/2002, 73/2002 to 79/2002, 149/2002 to 152/2002. The first Appellate Authority had disposed of the said appeals by a common order, dated 25.4.2003, by setting aside the assessment and by remanding the matters back to the Assessing Authority, with a direction to keep the assessment pending, till the out come of the decision of this Court, in W.P.No.6870 of 2001.
6. On dismissal of the writ petition, the Assessing Officer had restored his earlier order and passed an assessment order, dated 10.4.2007, for the assessment years 1988-1989 to 1999-2000 and 2002-2003 to 2005-2006, without disturbing the earlier demand raised before 1.4.2002. Subsequently, the assessment orders passed by the Assessing Officer was challenged before the First Appellate Authority, in A.P.No.170/2004, 69/2005, 40/2006, 338/2006 and 11/2007 to 124/2007.
7. The First Appellate Authority had once again set aside the assessment and remanded it back to the Assessing Authority, with a direction to keep the assessment pending, till the outcome of the decision in R.A.No.43/2004. On dismissal of the review application in R.A.No.43/2004, the Assessing Officer had passed consequential orders, on 31.2.2008, for the assessment years 1991-1992, 1994-1995 to 1999-2000 and restored the earlier orders, without disturbing the demand raised prior to 1.4.2002.
8. While so, the Government of Tamil Nadu had introduced a Liberalized Samadhan Scheme, by enacting the Tamil Nadu Sales Tax (Settlement of Arrears) Act, 2008.
Section 4 of the Act is in respect of the eligibility for making application for settlement. As per the said Section, an application for settlement of arrears can be made for the arrears raised due to the assessment made prior to 1.4.2002 and against which an appeal or revision is not pending before any Court, on the date of the filing of the application. Therefore, the petitioner had made an application, dated 29.1.2009, before the second respondent.
9. On scrutiny, it was found that the application was in order and an acknowledgment in Form II, as per Rule 3(3) of the Tamil Nadu Sales Tax (Settlement of Arrears) Rules, 2008, had been issued. Thereafter, the petitioner had made a representation, dated 19.12.2008, before the first respondent, to clarify, as to whether he is eligible for the benefits of the Act, in view of the prevailing circumstances. However, without examining the contentions put forth by the petitioner, the first respondent, by way of a clarification, had issued Letter No.Drafting Cell-1/51872/2008, dated 7.1.2009, informing the petitioner that when orders are set aside and remanded back for fresh disposal, further orders passed by the Assessing Officer would only be an order, either under
Section 12 or under Section 16 of the Tamil Nadu General Sales Tax Act, 1959. Therefore, the demand raised, subsequent to 1.4.2002, would not qualify for settlement under the Tamil Nadu Sales Tax (Settlement of Arrears) Act, 2008. In such circumstances, the petitioner has preferred the present writ petition before this Court, under
Article 226 of the Constitution of India.
10. In the counter affidavit filed on behalf of the respondents, it has been stated that, under the Tamil Nadu Sales Tax (Settlement of Arrears) Act, 2008, arrears of tax, pending as on 31.3.2002, not covered by any appeal or revision, are eligible for settlement, on payment of a portion of arrears. The petitioner had prayed for the settlement of arrears, for the years 1991-1992, 1994-1995 to 1999-2000, for which demands were raised, on 31.12.2008, after a series of appeals and remand of assessments by the Appellate Assistant Commissioner, on 25.4.2003 and 14.9.2007. The petitioner had requested to consider the order, dated 11.2.2002, which had already been set aside, as on the date of the demand for settlement.
11. On the representation made by the petitioner, it was clarified by the first respondent, in his impugned letter, dated 7.1.2009, that the order was set aside and remanded back, for fresh disposal. The further order passed by the Assessing Officer would only be an order, either under
Section 12 or under Section 16 of the Tamil Nadu General Sales Tax Act, 1959. Therefore, the demand raised after 1.4.2002, would not qualify for settlement, under the Tamil Nadu Sales Tax (Settlement of Arrears) Act, 2008.
12. It has been further stated that in all the cases relating to the petitioner, the assessment orders, levying taxes on royalty charges, made on the assessee, prior to 31.3.2002, were appealed against and the matters were remanded for fresh disposal, in the year 2007. The assessments were finalised only in the year 2008 and demands were raised by the Assessing Officer in his order, dated 31.12.2008.
13. It has been further stated that the petitioner had represented before the Principal Secretary and Commissioner of Commercial Taxes to settle the arrears under the Samadhan Scheme, with reference to the order, dated 11.2.2002, passed for all the years, even though these orders were set aside and remanded back to the Assessing Officer, on 25.4.2003. Pursuant to the remand order, assessments were revised, on 10.4.2007, which were again set aside, on appeal and remanded, on 14.9.2007. The revision made on the same issue for the year 1988-1989, levying taxes on royalty receipts has also been confirmed by this Court, in its order, dated 30.9.2008, in R.A.No.43/2004. Pursuant to the remand, dated 14.9.2007, and following the High Court orders, assessment orders were passed and demands were raised, on 31.2.2008. The assessments made on 31.12.2008, pursuant to the remand are independent assessments. Since the earlier assessment order had become non est in law, while passing fresh assessment orders, it is open to the Assessing Officer to consider any other matter and the limitation for suo mottu revision will commence from the date of the latter assessment order. In such circumstances, in view of the various decisions of the courts of law, the clarification issued by the first respondent, dated 7.1.2009, is correct. Therefore, the writ petition filed by the petitioner is liable to be dismissed, as devoid of merits.
14. In view of the submissions made by the learned counsels appearing on behalf of the petitioner, as well as the respondents and on a perusal of the records available, it is seen that the initial assessment made by the Assessing Officer had been challenged by the petitioner by way of appeals, in Appeal Nos.14/2002, 73/2002 to 79/2002, 149/2002 to 152/2002. Thereafter, the assessments have been set aside and the matter had been remanded back to the Assessing Officer. Even though the assessments made by the Assessing Authority, afresh, is of a recent origin, the assessment relates to the years 1991-1992, 1994-1995 to 1999-2000.
15. In similar circumstances, this Court, by an order, dated 7.10.2009, made in W.P.Nos.18218 and 18219 of 2009, in (M/s.Anitha Plastics Vs. The Principal Secretary and Commissioner of Commercial Taxes and two others ) had held that, when an order of assessment is set aside on appeal and the matter is remanded back to the Assessing Authority, the fresh order passed by the said Assessing Authority would, in fact, substitute the original order. Therefore, the date of the order, merely, because it was passed after the remand, cannot deprive the petitioner of the benefits of the Scheme, which were available to other similarly situated persons.
16. It had also been held that when the remand made by the appellate authority is based on the fact that the original assessment order is not proper, the benefits that would have been available to the petitioner, under the Scheme, cannot be denied to him. The order passed by the Assessing Authority, after the remand, should be taken to be a fresh order, as though the order had been passed, at the first instance. In such circumstances, the benefits of the Scheme cannot be denied to the petitioner. In such view of the matter, the writ petition is liable to be allowed. Hence, it is allowed. No costs.
Sd/-
To
1.The Principal Secretary/Commissioner of Commercial Taxes, Ezhilagam, Chepauk, Chennai.
2.The Designated Authority namely, The Joint Commissioner (CT), Commercial Taxes Buildings, Dr.Thangaraj Salai, Madurai-20.