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M/s Sri Ratna Electricals Versus The Assistant Commissioner (CT)

2015 (10) TMI 1573 - MADRAS HIGH COURT

Determination of taxable turnover - Inclusion of discounts - Held that:- The only ground taken by the appellants therein was that when the issue raised before the Assessing Officer was on an interpretation of a Circular issued by the Joint Commissioner and also covered by another decision in favour of one of the group companies, there was no necessity for the appellants to go to the appellate authority and exhaust all statutory remedies. This Court, accepting the contentions of the appellants th .....

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5-8-2015 - R. Mahadevan, J. For the Petitioner : Mr P Rajkumar For the Respondent : Mr S Manoharan Sundaram, AGP (T) ORDER Heard the learned counsel for the petitioner and the learned Additional Government Pleader (Taxes), for the respondent. 2. The petitioner has come forward with the writ petition challenging the order of the respondent dated 3.7.2015. 3.1 The petitioner, a registered dealer on the files of the respondent under the provisions of the Tamil Nadu Value Added Tax Act, 2006 (herein .....

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e even after receipt of discount from the supplier M/s Ashirvad Pipes Private Limited. 3.2 According to the petitioner, during the assessment year 2013-14, the petitioner received turnover discount of ₹ 6,32,637/- and rate difference of ₹ 5,16,223/- from the said supplier M/s Ashirvad Pipes Pvt. Ltd., through credit notes. Further, according to the petitioner, apart from the reported total and taxable turnover in its monthly returns, they also filed Form WW before the respondent for .....

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would receive the objections. But, the petitioner's representative, expressed their inability to pay any advance tax. According to the petitioner, though a number of requests were made to accept their objections, all gone in vain. When that being the position, all of a sudden, the respondent has passed the impugned order on 03.07.2015, which was received on 16.07.2015, confirming the proposals by levying tax on the discounts received by the petitioner, treating the same as sales turnover in .....

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Commercial Taxes dated 04.11.2013, the respondent proceeded to levy tax on the disputed turnover. To that effect an order came to be passed on 03.07.2015, which is challenged herein. 5. The learned counsel appearing for the petitioner, referring to the Commissioner's Circular dated 04.11.2013, followed by a recent circular dated 11.08.2015, submitted that such an act of calculation of the turnover related to discounts is impermissible. 6. At this juncture, it is useful to refer to paragraph .....

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o are detected in a given return, the quantum of ITC which exceeds the output tax shall be reversed. Further, section 19(20) has nothing to do with levy of tax on the discount which has to be dealt with independently as per the provisions of the act and circumstances of each case. 5. In order to give effect for reversal of undue enrichment of ITC, section 19(20) should be given effect by correlating the sale price of goods with the corresponding purchase price. If the sale price is lesser than t .....

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issue and could have granted appropriate relief to the petitioner. 9. This Court considered the submissions made by the learned counsel on either side and perused the materials available on record. 10. A perusal of the impugned order dated 03.07.2015, it is crystal clear that neither the circular of the Commissioner of Commercial Taxes dated 04.11.2013 nor the appropriate statutory provision viz., Section 19(20) of the TNVAT Act have been referred to. 11. It is also brought to the notice of this .....

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s to go to the appellate authority and exhaust all statutory remedies. This Court, accepting the contentions of the appellants therein, set aside the impugned orders and remanded the matter to the assessing authority for fresh consideration by taking into account the Circular of the Commissioner dated 04.11.2013 and the orders of assessment passed in respect of one of the group companies. The relevant portions of the said Judgment is extracted hereunder:- "12. It is true that in exercise of .....

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