TMI Blog2019 (4) TMI 1639X X X X Extracts X X X X X X X X Extracts X X X X ..... ment Order, it becomes clear that the two units are constituents of the Petitioner. Whether the condition prescribed in Rule 23(2C) read with Form A-5 is satisfied in the instant case? - HELD THAT:- A fortiori , in the context of a refund application, the principle of substantial compliance would apply. If so applied, it is clear that the two 100% EOUs paid taxes at 2-4% on the purchases made by them and thereby substantially complied with the conditions under Section 4-E read with Rule 23 (2C) and Form A-5. Therefore, the claim for refund is valid and, consequently, the Impugned Order is liable to be quashed. Refund allowed - appeal allowed - decided in favor of appellant. - W.P.No.34721 of 2006 - - - Dated:- 10-4-2019 - Mr. Justice Senthilkumar Ramamoorthy For the Petitioner : Mr.B.Raveendran for M/s.K.J.Chandran For the Respondents : Mr.G.Dhana Madhri Government Advocate ORDER This Writ Petition is filed to quash the order dated 15.02.2006 of the First Respondent herein and direct the Third Respondent to refund the sum of ₹ 10,98,993/- to the Petitioner under Section 4-E of the Tamil Na ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t a 100% EOU. The third reason cited therein was that the claim for refund was made after the completion of the final assessment whereas the provisions of Rule 23(2C) provide for a claim of refund to be made prior to the completion of final assessment. 6.According to the Petitioner, the Third Respondent failed to note that Section 4-E of the TNGST Act provides for refund of tax paid by the 100% EOU and does not specify that the tax should have been paid to the seller. Further, in the instant case, the two subsidiary units purchased cotton for use in the manufacture of other goods for export and cotton is taxable at the point of last purchase within the state. Therefore, the two subsidiary units of the Petitioner paid the tax while filing monthly returns and not to the sellers. As regards the second reason, according to the Petitioner, Section 4-E refers to the entitlement of the 100% EOU and not of the dealer. As regards the third reason that was cited, the Petitioner states that the claim for refund was considered and accepted at the time of completion of the original assessment and, therefore, it is evident that the claim was made before completion o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd pointed out as to how the assessing officer had categorically stated that the purchases of cotton were made by the two 100% EOUs of the Petitioner and that the refund of the tax would be made separately. The learned counsel further pointed out as to how the claim for refund was subsequently rejected by letter dated 29.11.1999 for two reasons, namely, that the Petitioner had not paid tax on the purchase value of cotton to the sellers of cotton within the state and that the two units may be 100% EOU s but the Petitioner is not a 100% EOU. The learned counsel, thereafter, referred to the order passed in the two Revision Petitions and contended that the said orders are untenable and liable to be set aside by the Court. 10.In reply, the learned counsel for the Respondents referred to Rule 23(2C) and Form A-5 and contended that Section 4-E should be read with the said Rule and Form. According to the learned counsel for the Respondents, if so read, it is evident that the person claiming refund should provide a certificate from the selling dealer to the effect that tax was paid. In addition, the learned counsel also submitted that the Petitioner is not an exclusive EOU an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 'dealer' is significant especially in the context of a statute wherein tax is ordinarily imposed on the dealer. In the instant case, it is the admitted position that the two units of the Petitioner are 100% EOU s. The Original Assessment Order reflects that the total turnover, as determined, of the Petitioner for the Assessment Year 1996-97 is ₹ 88,79,38,565/- and the total taxable turnover is ₹ 44,07,16,178/-. As against the said total turnover, the refund claim is confined to the taxes paid on the turnover of Rajapalayam Spintex, namely, ₹ 5,68,212/- and that paid on the turnover of Rajapalayam Textiles, namely, ₹ 5,30,781/- aggregating to ₹ 10,98,993/-. Thus, it is evident that the refund claim is confined to taxes paid on purchases of cotton by the two 100% EOU s of the Petitioner and does not extend to the other divisions of the Petitioner. It is also evident from the Original Assessment Order that the said two units of the Petitioner paid taxes on the purchases made by them at 2% to 4%. 15.The word 'unit' is not specifically defined in the TNGST Act. Accordingly, it has t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctrine has been the subject of a myriad of cases and quite often, the critical question to be examined is whether the requirements relate to the substance or essence of the statute, if so, strict adherence to those requirements is a precondition to give effect to that doctrine. On the other hand, if the requirements are procedural or directory in that they are not of the essence of the thing to be done but are given with a view to the orderly conduct of business, they may be fulfilled by substantial, if not strict compliance. In other words, a mere attempted compliance may not be sufficient, but actual compliance with those factors which are considered as essential. 18. The said view and principle was affirmed and followed in a more recent judgment of a Five Judge Bench of the Hon'ble Supreme Court in THE COMMISSIONER OF CUSTOMS Vs. DILIP KUMAR, (2018) 9 SCC 1. A fortiori, in the context of a refund application, the principle of substantial compliance would apply. If so applied, it is clear that the two 100% EOUs paid taxes at 2-4% on the purchases made by them and thereby substantially complied with the conditions under Section 4-E read with Rule 23 ( ..... X X X X Extracts X X X X X X X X Extracts X X X X
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