Home Case Index All Cases VAT and Sales Tax VAT and Sales Tax + HC VAT and Sales Tax - 2014 (8) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2014 (8) TMI 897 - HC - VAT and Sales TaxBenefit of compounding system of assessment - Assessee made inter state purchases in earlier years - Tamil Nadu Value Added Tax Act, 2006 - Held that:- dealer effecting second and subsequent sale within the State having a business relating to taxable goods less than ₹ 50 lakhs may pay tax at his option, for each year on his turnover relating to taxable goods at the rate not more than 0.5 per cent. The option to pay at the compounded rate has to be exercised (a) within 30 days from the date of commencement of business, (b) in cases of assessee whose turnover during the previous year is less than ₹ 50 lakhs he has to exercise the option on or before 30th of April of the year for which he exercises the option for the year 2008-09 within 30 days from the date of commencement of the Tamil Nadu Value Added Tax Ordinance, 2008. The proviso to sub-section (b) states that if a dealer's turnover reached ₹ 50 lakhs during the previous year, he shall not be entitled to exercise the option for, subsequent year. Section 3(4) of the Act refers to the entitlement of assessee to have the benefit of compounded rate at 0.5 per cent subject to his turnover relatable to taxable goods being less than ₹ 50 lakhs. The definition of "turnover" given under section 2(41) refers to aggregate amount for which goods are bought or sold, or delivered or supplied. Given the fact that the turnover assessed relates to taxable goods, the same has relevance to taxable turnover. As per section 2(38) of the Act, "taxable turnover" means the turnover on which the dealer has to pay tax as determined after making such deductions from his total turnover and in such manner as may be prescribed. Thus as far as section 3(4) is concerned, when the taxable turnover is less than ₹ 50 lakhs, he is entitled to have the benefit of compounded rate under section 3(4)(a) of the Act. There being no provision to deny the benefit of section 3(4) of the Act, on the mere ground of the petitioner's inter-State purchase in the previous years, I do not find any legal support in the order of the second respondent denying the benefit of section 3(4) of the Act for the assessment year 2009-10. The second respondent is hereby directed to apply provisions contained under section 3(4) of the Act subject to the petitioner satisfying all the other requirements of the Act. Decided in favour of assessee.
|