IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED:
29. 4.2013 CORAM: THE HONOURABLE MR.JUSTICE V.DHANAPALAN W.P.No.12607 of 2013 Chennai Petroleum Corporation Limited, Represented by Shri S.Ramakrishnan, Deputy General Manager (Finance), Manali, Chennai-600 068. .. Petitioner Vs. The Deputy Commissioner (C.T)-III, Large Tax Payers Unit, 5th Floor, Dugar Towers, Marshall Road, Chennai-600 008. .. Respondent Writ Petition filed under Article 226 of the Constitution of India, praying for issuance of a Writ of Certiorarified Mandamus to call for the records in CST 690404/2007-08, dated 4.7.2012 passed by the respondent and quash the same as arbitrary and illegal and consequently direct the respondent to consider the representation for rectification. For petitioner : Mr.Joseph Prabakar For respondent: Mr.Manoharan Sundaram, Govt. Advocate ORDER By consent of the learned counsel appearing for the parties, the Writ Petition is taken up for disposal at the admission stage.
2. Heard Mr.Joseph Prabakar, learned counsel for the petitioner and Mr.Manoharan Sundaram, learned Government Advocate who took notice for the respondent.
3. The petitioner has moved this Court challenging the order passed by the respondent in CST.690404/2007-08, dated 4.7.2012, seeking to quash the same as arbitrary and illegal and consequently to direct the respondent to consider the representation for rectification.
4. Short facts pleaded by the petitioner are as follows: (a) The petitioner-Chennai Petroleum Corporation Limited, is a manufacturer of various petroleum products like Bitumen, Carbon Black Feed Stock (CBFS), CRMB, Hexane, Slack Wax, Wax, etc. and registered under the Tamil Nadu Value Added Tax Act (for short, 'the TNVAT Act') and the Central Sales Tax Act (for short, 'the CST Act') under the jurisdiction of the respondent. (b) They filed their Returns and the CST Assessment for 2007-08 was completed and an order dated 5.3.2012 was passed by the respondent, which was received by the petitioner on 6.3.2012 and in the said assessment order dated 5.3.2012, the respondent considered various transactions during 2007-08 and finally arrived at the total turnover and taxable turnover at Rs.9691,11,28,044/- and Rs.2093,64,53,063/- respectively. The respondent considered the amount of tax due and tax paid and determined that the petitioner paid tax of Rs.1,77,20,885/- in excess of the tax due and accordingly, they issued notice to the petitioner in Form 4 for refund of Rs.1,77,20,885/-. (c) Upon perusal of the entire order, the petitioner-Company found certain errors apparent on the face of the assessment order and therefore, they filed two Form-C Declarations covering net sales turnover of Rs.9,91,023/- and requested the respondent to assess then turnover at the concessional rate of 3% and they also filed Form-H Declaration covering a pre-export sales turnover of Rs.2,12,047/- and requested the respondent to grant exemption of the transaction which was originally taxed at 30%. (d) In page No.6 of the said assessment order, dated 5.3.2012, in item 2 of the table, the respondent assessed inter-State sales turnover of petroleum products for a value of Rs.4,05,47,510/- at 30% since these transactions were not supported by Form-C. The petitioner, during the assessment proceedings, filed two lists, vide letter dated 11.2.2011, wherein they gave the details of sales with name of each of the commodities sold, namely Bitumen, Carbon Black Feed Stock (CBFS), CRMB, Hexane, Slack Wax, Wax etc., whereas the respondent erroneously grouped the entire list of commodities under the nomenclature "Petroleum Products" and accordingly assessed the turnover to tax at 30% in the assessment order. The rate of 30% is applicable for sale of petrol and not for other petroleum products like Bitumen, Carbon Black Feed Stock (CBFS), CRMB, Hexane, Slack Wax, Wax etc. (e) As per Section 8 of the CST Act, if an inter-State sales transaction is not covered by Form-C, then the rate of tax would be equivalent to the rate of VAT applicable for the commodity in the particular State. Therefore, the respondent ought to have assessed these products individually and applied the rate of tax for each of the products specified under the TNVAT Act. Therefore, the respondent committed error of not assessing these products at their respective rates instead of assessing the turnover to tax at 30%. (f) The petitioner pointed out the said glaring error to the respondent by furnishing the details of commodities sold by them with the applicable rate of tax and vide letter, dated 16.4.2012, the petitioner sought for rectification of the error under Section 84 of the TNVAT Act read with Section 9(2) of the CST Act. (g) The respondent, without referring to the request made by the petitioner for rectification, issued revised order, dated 29.6.2012, accepted Form-C Declaration for a turnover of Rs.9,91,023/- and assessed the turnover at 3% as requested by the petitioner and rejected Form-H for a turnover of Rs.2,12,047/- for the reason that the petitioner did not furnish other export documents like Bill of Lading, Shipping Bill, etc. in addition to furnishing Form-H. As regards the error of grouping various products, the respondent did not correct the same, but assessed the "Petroleum Products" without Form-C to tax at 12.5% instead of 30% as was the case in the original order. (h) Thereafter, the respondent issued the impugned revised order, dated 4.7.2012 correcting the arithmetic error in the amount of tax due, which was shown in the earlier revision order dated 29.6.2012 and thereby, the respondent rectified the errors relating to acceptable of declaration of Form-C only and determined the excess tax paid by the petitioner at Rs.2,49,10,842/-. The respondent did not rectify the error relating to grouping of certain products as a whole under the head "Petroleum Products" and assessing the entire range of products to tax wrongly at 12.5% instead of applying the rate of tax for each of the items sold by the petitioner. (i) The petitioner received the said second revision order only on 27.7.2012. In the meanwhile, the petitioner filed another representation, dated 12.7.2012 in the office of the respondent on 18.7.2012 bringing to the notice of the respondent the error relating to grouping of commodities instead of showing individual items with the respective rate of tax. The petitioner pointed out that the individual items sold by the petitioner should be dealt with separately in the assessment order and the rate of VAT should be applied wherever the petitioner had not filed Form-C Declarations. The petitioner pointed out the excess tax of Rs.31,86,620/- charged by the respondent due to the error of grouping of commodities and also pointed out that as regards rejection of Form-H, the respondent erroneously charged 30% since the commodity involved was Sulphur which is liable to VAT at 4% only and the petitioner furnished copies of Invoices pertaining to the above transaction for value of Rs.2,12,047/- and requested for assessing the transaction to tax at 4%. (j) However, the respondent did not rectify the error and therefore, the petitioner wrote a reminder letter on 31.7.2012, which was received by the respondent on 2.8.2012. As the petitioner did not receive any order or reply from the respondent, they made a representation to the Joint Commissioner (CT), Large Tax Payers Unit, Egmore, Chennai, vide letter dated 3.1.2013, which was received by the Joint Commissioner (CT) on 4.1.2013. Thereafter, the petitioner wrote another reminder letter to the Joint Commissioner (CT), dated 5.2.2013 and yet another representation, dated 1.4.2013 was filed before the Joint Commissioner (CT), Large Tax Payers Unit, Chennai. The respondent has not rectified the error till date. Hence, the petitioner has filed this Writ Petition for the above relief.
5. On the above background of pleadings, learned counsel for the petitioner submitted that as the rate of tax adopted by the respondent-authority is inconsistent with the rate specified in the First Schedule to the TNVAT Act and the clarifications issued by the Head of Department of the respondent in respect of the applicability of rate of tax for Bitumen, Carbon Black Feed Stock (CBFS), CRMB, Hexane, all kinds of Wax, scrap and waste, etc. and particularly, when the petitioner agreed for the assessment of CBFS-LE at 12.5% as an unclassified item under Part-C of First Schedule to the TNVAT Act, the petitioner sent a letter dated 16.4.2012 to the respondent, which was followed by various reminders, last of which is dated 1.4.2013, seeking rectification of the error under Section 84 of the TNVAT Act read with Section 9(2) of the CST Act and therefore, learned counsel made a consistent plea that if the said letter dated 1.4.2013 is considered, then the grievance of the petitioner would be redressed.
6. Learned Government Advocate appearing for the respondent submitted that the error pointed out by the petitioner is to be looked into by the respondent/assessing authority in accordance with law and the rectification sought for by the petitioner under Section 84 of the TNVAT Act read with Section 9(2) of the CST Act, has to be considered by the respondent, as there is an error in the impugned order, dated 4.7.2012.
7. In the light of the above stated position, considering the facts and circumstances of the case and the submissions made by the learned counsel appearing for the parties, as the petitioner has raised a grievance in their letter dated 1.4.2013, addressed to the Joint Commissioner (CT), Large Tax Payers Unit, Chennai, stating that there is error in the impugned order, dated 4.7.2012 passed by the respondent-Deputy Commissioner (CT)-III, Large Tax Payers Unit, Chennai, this Writ Petition is disposed of, with a direction to the respondent to consider the petitioner's grievance in their letter dated 1.4.2013, give an opportunity of hearing to the petitioner and pass appropriate orders, on merits and in accordance with law, within a period of four weeks from the date of receipt of a copy of this order. No costs. 29.4.2013 cs Index: Yes Internet: Yes To The Deputy Commissioner (C.T)-III, Large Tax Payers Unit, 5th Floor, Dugar Towers, Marshall Road, Chennai-600 008. V.DHANAPALAN,J cs W.P.No.12607 o”
29. 4.2013