Case Law Details
Orient Electricals and Engineers India (P) Ltd. Vs Assistant Commissioner (ST) (Madras High Court)
In the case of Orient Electricals and Engineers India (P) Ltd. vs Assistant Commissioner (ST) (Madras High Court), the petitioner, a dealer under the Tamil Nadu Value Added Tax Act, 2006 (VAT Act) and the Central Sales Tax Act, 1956 (CST Act), challenged an order dated 12.01.2023, which imposed tax liability on the petitioner based on the assumption of inter-state sales during the relevant assessment period.
The petitioner contended that they had only engaged in intra-state sales and that the conclusion of inter-state sales in the impugned order was erroneous. Upon discovering the order, the petitioner filed a rectification petition seeking to contest the tax demand on its merits.
The petitioner, through their counsel, argued that the tax liability was determined incorrectly based on a misunderstanding of their sales activities. They offered to remit a sum of Rs.3,00,000/- (Rupees Three lakhs only) as a condition for remand.
The Government Advocate (Tax), representing the respondent, pointed out that there was a significant delay in filing the writ petition since the impugned order was dated 12.01.2023. However, upon examining the impugned order, the court observed that the tax liability was indeed based on the assumption of inter-state sales, which the petitioner disputed.
Considering the circumstances, the court set aside the impugned order and remanded the matter for reconsideration, with the condition that the petitioner remit a sum of Rs.3,00,000/- within three weeks. The petitioner was also given the opportunity to submit a reply to the show cause notice within the same period.
The court directed the respondent to provide a reasonable opportunity, including a personal hearing, and to issue a fresh order within three months from the date of receiving the remitted sum of Rs.3 lakhs. It was clarified that the deposit of Rs.3 lakhs was subject to the outcome of the remanded proceedings.
In conclusion, the writ petition was disposed of with no order as to costs, and the connected miscellaneous petition was closed.
This judgment illustrates the court’s willingness to provide the petitioner with an opportunity to contest the tax demand on its merits, despite the delay in filing the writ petition. The court emphasized the importance of ensuring that tax liability is determined accurately and fairly, taking into account the petitioner’s submissions and evidence.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
The petitioner was a dealer under the Tamil Nadu Value Added Tax Act, 2006 (the VAT Act) and under the Central Sales Tax Act, (the CST Act) 1956.
2. The petitioner asserts that he was unaware of the issuance of the impugned order dated 12.01.2023 until recently. Upon coming to know of such order, the petitioner filed a rectification petition because such order proceeded on the basis that the petitioner had inter-state sales during the relevant year.
3. By referring to Form-I, Form-WW and annexure thereto, learned counsel for the petitioner submits that the petitioner had only intra-state sales and that it was wrongly concluded that there were inter-state sales. Therefore, he seeks an opportunity to context the tax demand on merits. On instructions, he submits that the petitioner agrees to remit a sum of Rs.3,00,000/- (Rupees Three lakhs only) as a condition for remand.
4. Mr. V. Prashanth Kiran, learned Government Advocate (Tax), accepts notice for the respondent. He points out that the impugned order is dated 12.01.2023. Consequently, he contends that the writ petition is liable to be rejected on the ground of laches.
5. On perusal of the impugned order, it is evident that tax liability was imposed on the basis that the petitioner’s turnover from inter-state sales was Rs.58,14,484/-. The petitioner contends that such tax liability was arrived at on the misconception that the petitioner had inter-state sales. The total tax liability in the order impugned herein is Rs.8,43,100/. The petitioner has offered to pay a sum of Rs.3 lakhs as a condition for remand. In these facts and circumstances, it is just and appropriate that the petitioner be provided an opportunity to establish that there was no inter-state sales during the relevant assessment period.
6. For reasons set out above, the impugned order dated 12.01.2023 is set aside and the matter is remanded for reconsideration on condition that the petitioner remits a sum of Rs.3,00,000/- (Rupees Three lakhs only) within three weeks from the date of receipt of a copy of this order.
The petitioner is also permitted to submit a reply to the show cause notice within the said period. The respondent is directed to provide a reasonable opportunity, including a personal hearing, and thereafter issue a fresh order within three months from the date of receipt of a sum of Rs.3 lakhs was received from the petitioner. For the avoidance of doubt, it is made clear that the deposit of Rs.3 lakhs is subject to the outcome of the remanded proceedings.
7. W.P.No.11483 of 2024 is disposed of on the above terms. There shall be no order as to costs. Consequently, connected miscellaneous petition is closed.
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