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TMI ID= 325653
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2016 (3) TMI 837 - MADRAS HIGH COURT

Britannia Industries Ltd Versus The Deputy Commissioner (CT) -III (FAC) LTU

Demand of VAT and imposition of penalty - Non-payment of VAT by sellers - Held that:- the issue is covered by the judgment in the case of Sri Vinayaga Agencies v. The Assistant Commissioner (CT), Chennai and another [2013 (4) TMI 215 - MADRAS HIGH COURT], therefore, the payment of VAT by sellers is allowed. - Decided partly in favour of petitioner

No.- W. P. Nos. 7507 to 7511 of 2016, W.M.P.Nos.6725 to 6734 of 2016

Dated.- March 1, 2016


  1. Sri Lakshmi Textiles Versus The Commissioner of Commercial Taxes And Others - 2016 (1) TMI 329 - MADRAS HIGH COURT

  2. Sri Vinayaga Agencies Versus The Assistant Commissioner (CT) - 2013 (4) TMI 215 - MADRAS HIGH COURT

  3. Althaf Shoes (P) Ltd. Versus Assistant Commissioner (CT) , Valluvarkottam Assessment Circle, Chennai-6 - 2011 (10) TMI 567 - Madras High Court

M. Duraiswamy, J.

For the Appellant : Mr. N Sriprakash

For the Respondent : Mr. Manoharan Sundaram Addl. Govt. Pleader


The petitioner has filed the above writ petitions to issue a Writ of Certiorari to call for the records relating to the impugned orders dated 30.12.2015 passed by the respondent in respect of assessment years 2010-11, 2011-12, 2012-13, 2013-14 and 2014-15 and to quash the same.

2. Writ petitions were filed to reverse the Input Tax Credit along with the consequential imposition of penalty passed by the respondent, which is wholly without jurisdiction and contrary to the principles laid down by this court in the judgement reported in 50 VST 179 [Althaf Shoes (P) Ltd v. Assistant Commissioner (CT), Valluvarkottam] and the order of this court made in W.P.(MD)No.17266 of 2015, dated 25.09.2015.

3. According to the petitioner, they had availed Input Tax Credit upon the payment of VAT on their purchases from registered dealers on the basis of the original tax invoices. However, on the ground of alleged non-payment of VAT by the sellers, the petitioner has been directed to reverse Input Tax Credit in total disregard to the principles laid down by this court in the judgements referred to above. In W.P.(MD)No.17266 of 2015, this court, following the judgement reported in 2013 (60) VST 283 (Mad) [Sri Vinayaga Agencies v. The Assistant Commissioner (CT), Chennai and another], allowed the writ petition.

4. In the judgement reported in 2013 (60) VST 283 (Mad) [cited surpa], in paragraph No.9, it has been held as follows:-

"9. Sub-section (16) of section 19 states that the Input Tax Credit availed is provisional. It, however, does not empower the authority to revoke the input tax credit availed on a plea that the selling dealer has not paid the tax. It only relates to incorrect, incomplete or improper claim of Input Tax Credit by the dealer. It is not so in these cases. In the present case, the petitioner-dealer, admittedly, has paid the tax to the selling dealer and claimed Input Tax Credit and that was accepted at the time when the self-assessment was made. Even the pre-revision notices and the orders under challenge fairly state that the petitioner-dealer had paid tax to the dealer. It is, therefore, for the department to proceed against the selling dealer for recovery of tax in the manner known to law. The provision under which the present has been initiated, namely, invoking sub-section (16) of Section19, does not appear to be correct on the admitted facts as above. All the revision orders revising the Input Tax Credit on the admitted case of tax having been paid to the selling dealer, therefore, are found to be totally incorrect, erroneous and contrary to the provisions of the TNVAT Act and Rules. As a result, all the orders are liable to be set aside."

5. Mr.Manoharan Sundaram, learned Additional Government Pleader, takes notice for the respondent and submitted that the issue involved in the present writ petitions are covered by the judgement reported in 2013 (60) VST 283 (Mad) [cited surpa]. Further, the learned Additional Government Pleader, submitted that the respondent had preferred appeals as against those judgements and the appeals are pending without any interim orders.

6. In view of the dictum laid down by this court, following the orders of this court, the writ petitions are allowed. Since the issue involved in the present writ petitions relates to the payment of VAT and imposition of penalty by the sellers, the writ petitioners are allowed only in so far as the issue involving the payment of VAT by the sellers. So far as the other issues are concerned, since the petitioner has got appeal remedy, it is open to the petitioner to file appeals as against the impugned orders. No costs. Consequently, connected miscellaneous petitions are closed.

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