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2016 (11) TMI 671 - MADRAS HIGH COURT

2016 (11) TMI 671 - MADRAS HIGH COURT - TMI - Rectification under section 55 of the TNGST Act - refund of the Additional Sales Tax - Held that: - any dealer who is not liable to pay tax under the principal Act, either by reason of his not having sufficient gross turnover of goods or by reason of exemption given under section 7 of the principal Act, is not liable to pay the additional sales tax. If a dealer is exempted by the State Government under the second proviso to section 3(1) of the Act of .....

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could be arrived it is that the turnover in respect of the goods, which is sales or purchases are not taxable under the principal Act in the hands of any dealer by reason of section 8 of the principal Act, is not liable to payment of additional tax. - Writ Petition allowed - the impugned order quashed and the respondent is directed to extend the benefit of the exemption notification and effect the refund of the Additional Sales Tax paid by the petitioner, by considering their claim date 18. .....

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dealer on the file of the respondent under the erstwhile provisions of Tamil Nadu General Sales Tax Act, 1956 [TNGST Act] and engaged in the manufacture of two wheeler spare parts and accessories for supplies to TVS Motor Company Limited, Hosur. The order impugned in this Writ Petition is an order rejecting the petitioner s Application dated 18.7.2013, filed under section 55 of the TNGST Act, for rectifying the error which has crept in the order of assessment dated 24.7.2009, under the TNGST Ac .....

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ioner had filed its returns and claimed exemption from payment of Sales Tax with regard to the raw materials which were supplied to M/s TVS Motor Company for manufacture of two and three wheelers in their factory at Hosur. The claim for exemption was based on a notification issued by the Government in G.O.Ms.No.181. The Government while issuing the said notification passed three orders, all bearing same Government Order Number and date viz. Notification Nos. I, II and III. (ii) Notification No.I .....

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under the Central Sales Tax Act. (iii) The petitioner s claim for exemption is under Notification No.II. 4. There is no dispute to the fact that the benefit of Notification No.II, was extended to the petitioner and though they have paid tax, Surcharge and Additional Sales Tax for entire turnover under protest, in view of the notification, they were granted refund of tax of ₹ 48,36,658/- and Surcharge of ₹ 2,63,582/- respectively. However, with regard to the Additional Sales Tax which .....

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he Taxable Turnover for the purpose of levying Additional Sales tax. Further it was contended that in terms of section 2(1)(aa) of the Tamil Nadu Additional Sales Tax Act, 1970, any addition to the tax payable under the Tamil Nadu General Sales Tax Act, 1959, the dealers shall pay the Additional Sales Tax at appropriate rate when the taxable turnover exceeds ₹ 10 crores, whereas in the petitioner s case the Additional Sales Tax was wrongly levied on the exempted turnover, in violation of t .....

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R (C.T.) SALEM AND ANR [1973 (vol.XXXII) STC 522], wherein it was held as follows: In a case where a rectification is sought, it is not for the authorities to lightly discountenance such a request without giving any reason or without adverting to the representations made by the aggrieved partly seeking for rectification. Though the verb used in section 55 is may and therefore enabling, yet the power vested by the statute on the appropriate authority cannot be always equated to a discretionary po .....

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tutory authorities requesting them to rectify an error so as to avoid any illegal assessment; then it cannot be said that even in such a situation the work may has to be understood as may ; on the other hand, it should be understood as shall . .....If, therefore, the power vested in the authorities in sub-section (1) of section 55 is not always a discretionary power, but is normally to be understood as a duty with which the concerned authority is enjoined, then the next question is when the powe .....

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uld consider the same and cannot lightly discountenance such a request, without giving any reason or without adverting to the submissions made by the dealer seeking rectifications. This is sufficient to hold that the impugned order is illegal. However, as a consequence, the matter has to be remitted back to the authority. 8. But, in this case the Writ Petition is pending from the year 2014 and there is also a prayer for grant of refund, by applying the exemption notification. Though counter affi .....

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is not sustainable for more than one reason, in the light of the decision of the Hon ble Supreme Court as well as the decision of the Hon ble Division Bench of this Court. 9. In the case of ASHOK SERVICES CENTRE AND ANOTHER v. STATE OF ORISSA [1983 (volume 53) STC 1], identical issue arose for consideration arising under the provisions of the Orissa Sales Tax Act and Orissa Additional Sales Tax Act 1975. The facts of the said case were also somewhat identical to the instant case and the questio .....

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Acts together as if the two Acts were one. By reason of section 3(2) of the Additional Sales Tax Act, section 8 of the principal Act, which is given an overriding effect by the use of the non obstante clause, is applicable to the levy of additional tax also. The dealer who is referred to in section 3(1) of the 1975 Act should be understood as a dealer who is liable to pay tax under the principal Act. The gross turnover referred to in the 1975 Act should be understood as that part of the gross t .....

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er in respect of goods whose sales or purchases are not taxable under the principal Act in the hands of any dealer by reason of section 8 of the principal Act is not liable to the payment of additional tax by reason of the first proviso to section 3(1). Any other turnover which is exempted by the State Government under the second proviso to section 3(1) is also not liable to additional tax. 11. Thus by applying the above decision, the only conclusion that could be arrived it is that the turnover .....

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