TMI Blog2014 (8) TMI 897X X X X Extracts X X X X X X X X Extracts X X X X ..... ntitlement 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t date, on which such turnover has reached rupees fifty lakhs. The petitioner states that for 2009-10, he opted for section 3(4) assessment and filed returns in form K and paid the tax at five per cent. The second respondent herein issued notice dated November 18, 2011 for the assessment year 2009-2010 by pointing out that the petitioner had effected purchases of readymade garments from outside the State during the assessment year 2009-10 and hence in view of section 3(4)(a) of the Act, the petitioner was not eligible for assessment under section 3(4) of the Act. On the notice issued, the petitioner submitted his objections on February 24, 2011 stating that it did not make any inter-State purchase during the assessment year 2009-10 and as the turnover was below ₹ 50 lakhs, it was entitled to opt for assessment under section 3(4) of the Act. The petitioner was also issued notices on the same day for the earlier assessment year. The petitioner states it purchased garments from other States for the earlier assessment years 2007-08 and 2008-09 for a small value only for ₹ 45,469 and ₹ 13,311, respectively. Immediately realising that it might not be entitled to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, as far as the present year is concerned, since the petitioner had violated conditions under section 3(4) of the Act, the ineligibility under section 3(4) operated. The learned counsel for the petitioner points out that against the denial of input-tax credit, the petitioner has filed W.P. Nos. 21514 and 21515 of 2011 and the same was admitted and injunction was granted by this court. Section 3 of the Tamil Nadu Value Added Tax Act deals with levy of taxes on sale of goods. Section 2(42) defines year to mean financial year. Section 3(1) is the charging section generally levying tax on dealer whose total turnover for a year is not less than ₹ 5 lakhs. There are exceptions to this. We are not presently concerned about this. Section 3(2) states that subject to sub-section (1), a dealer shall pay tax on every sale made in the case of goods falling under Part B or C of the First Schedule within the State at the rate specified therein. Sub-section (4) provides for compounding scheme of taxation. It reads as under: (4). (a) Notwithstanding anything contained in sub-section (2), but subject to the provisions of sub-section (1), every dealer, who effects second and subsequen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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. Going by the, scheme of the Act, that tax is payable in respect of sales effected during the year meaning financial year starting from April, to 31st March, the previous year herein refers to the year previous to the financial year under consideration. Thus once the assessee crosses ₹ 50 lakhs in any previous year, the benefit of availing of the compounded rate for subsequent year would not be there at all. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erred to by the assessing officer on the previous year turnover having inter-State sales turnover too to disentitle the petitioner from claiming compounded rate of tax, I do not find any legal support to the contention of the respondent that the petitioner is not entitled to have the benefit of the compounded rate of tax as under section 3(4) of the Act. So long as the petitioner has the taxable turnover for the year under consideration at less than ₹ 50 lakhs and so too during the immediate previous year, the taxable turnover of that year remained at less than ₹ 50 lakhs, the mere fact of his earlier years having inter-State purchase, per se, would not go against the claim of the petitioner to have the assessment done under section 3(4) of the Act. The learned counsel for the petitioner pointed out that the taxable turnover in respect of the previous assessment years, viz., 2007-08 and 2008-09, even as per the assessment order dated August 3, 2011 was ₹ 37,32,644 and for 2008-09, is ₹ 44,96,930. Thus agreeing with the submission of the petitioner, there being no provision to deny the benefit of section 3(4) of the Act, on the mere ground of the petitione ..... X X X X Extracts X X X X X X X X Extracts X X X X
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