TMI Blog2020 (5) TMI 494X X X X Extracts X X X X X X X X Extracts X X X X ..... 377; 300 crores in a year. Merely because they read identically, the interpretation given by the Courts earlier for levy of purchase tax under Section 7A of the TNGST Act, 1959 and exemption cannot be straight away imported for levy of purchase tax under Section 12 of the Tamil Nadu Value Added Tax Act,2006 in view of few differences in the language in Item 16,III Schedule to the TNGST Act, 1959, and Item 18, Part B IV Schedule to the Tamil Nadu Value Added Tax Act, 2006 - Item 16, III Schedule to the TNGST Act, 1959 was to be read along with Section 8 of the TNGST Act, 1959. Similarly, Item 18, Part B IV Schedule to the Tamil Nadu Value Added Tax Act, 2006 has to be read along with and Section 15 of the said Act, 2006. Though they gave to dealers of the goods enumerated therein exemption from payment of tax upto ₹ 300 Crores, yet the consequence under the respective enactments are different as far as levy of purchase tax are concerned. There are few but very important differences in the Tamil Nadu Value Added Tax Act, 2006 which distinguishes the levy under Section 12 of the Act from levy under Seciton 7A of the TNGST Act,1959. Though the levy under Section 7A of the T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tioner: Mr. N. Prasad For Respondents : Mr. Mohammed Shaffiq COMMON ORDER By this common order all the 6 writ petitions are being disposed. In W.P.Nos. 21983-87 of 2016, the petitioner has challenged the respective assessment orders dated 29.1.2016 passed by the respondent for the assessment years 2010-11 to 2014-15. 2.I n W.P.No. 21982 of 2016, the petitioner has prayed for an alternate relief for a writ of mandamus to direct the respondent to accept the revised return filed by the petitioner to allow input tax credit on the purchase tax payable by the petitioner under Section 12 (2) of the Tamil Nadu Value Added Tax, 2006. 3. By the impugned assessment orders, the respondent has confirmed the demand on the petitioner under Section 12(1) of the Tamil Nadu Value Added Tax,2006 for the respective assessment years. 4. The impugned order has also imposed with penalty under Section 27(3)(c) of the Tamil Nadu Value Added Tax Act, 2006 on the petitioner. 5. The petitioner, a dealer of turmeric had locally purchased turmeric from various registered/unregistered dealers without payment of tax as their turnover were reportedly below ₹ 300 crores during the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Act was without justification. 12. In the affidavit filed in support of these writ petitions, the writ petitioner has primarily relied on the decision of this court in the following 2 cases:- i. Hotel Shri Kannan versus State of Tamil Nadu [2007] 8 VST 97; ii. Ruchi Soya Industries Ltd versus Commercial Tax Officer [2008] 12 VST 546. 13. Strong reliance was also placed on a clarification of the Government of Tamil Nadu dated 24.12.1999 bearing D.Dis. Acts Cell II/75893/99 as amended 4.10.2000 bearing reference D.Dis.Act Cell II/52300. 14. It is submitted that in Hotel Shri Kannan versus State of Tamil Nadu [2007] 8 VST 97 , the Division Bench of this Court had set aside the assessment and permitted all the assets is to file their objections supported with material objections. 15. Alternatively, it was contended that the tax payable under Section 12(1) of the Tamil Nadu Value Added Tax Act, 2006 was available by way of Input Tax Credit under Section 12(2) read with Section 19(3)(c) of the Act. 16. It is therefore contended that since input tax credit is available under Section 19 of the Tamil Nadu Value Added Tax Act, 2006 read with Tamil Nadu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t words and sentences from the judgement divorced from the context of the question under consideration. 22. A further reference was made to the decision of the Hon'ble Supreme Court in S J. Pande versus P.K Balakrishnan (1993) 3 SCC 297 in this context. 23. The learned counsel for the petitioner also referred to the decision of the Supreme Court in Govind Saran Gunga Saran Vs Commissioner of Sales Tax 1985 (Suppl) SCC 205 wherein the Court identified the components which are factored while taxing namely:- (i) the character of the imposition known by its nature which prescribes the taxable event attracting the levy; (ii) a clear indication of the person on whom the levy is imposed and who is obliged to pay the tax, (iii) the 3rd the rate at which the tax which is imposed, and (iv) the 4th the measure of value to which the rate will be applied for computing the tax liability. 24. Learned Counsel submitted that if those components are not clear and definitely ascertainable, it is difficult to say that the levy exist in point of law. 25. It is submitted that any uncertainty or vagueness in the legislative scheme defining any of those componen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch concessional rate of duty and will be entitled to ask for refund, if he had paid more. 34. The learned counsel for the petitioner submits that same analogy can be adopted in the context of payment of purchase tax and the appropriate rate of tax would be under Item 18, Part B, IV Schedule and not under Item 52, Part B to the I Schedule of the Tamil Nadu Value Added Tax Act, 2006. 35. He submits that if the rate prescribed in the Item 18, Part B of the IV Schedule to the Tamil Nadu Value Added Tax Act, 2006 is applied, the petitioner cannot be saddled with purchase tax liability under Section 12(1) of the Tamil Nadu Value Added Tax Act, 2006. 36. He further referred to the decision of the Hon'ble Supreme Court in Bharat Forge And Press Industries Private Limited Versus Collector of Central Excise (1990) 1 SCC 532. 37. He submits that unless department can establish that the goods in question can by no conceivable process of reasoning be brought under any of the tariff entry, resort cannot be had to residuary item. 38. The respondent has filed a separate counter in W.P No. 21982 of 2016 and a common counter in W.P.No.21983 to 87 of 2016. It is submitted tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no direct precedents under the Tamil Nadu Value Added Tax Act, 2006 on the subject except under the provisions of the TNGST Act, 1959 in the case of Hotel Shri Kannan versus State of Tamil Nadu [2007] 8 VST 97 and Ruchi Soya Industries Ltd versus Commercial Tax Officer [2008] 12 VST 546 . Both are decisions of a Division Bench of this 46. The Division Bench of this Court in Ruchi Soya Industries Ltd . case referred to supra had an occasion to deal with Section 7A of the TNGST Act, 1959. Case dealt with a somewhat similar situation where the dealer had purchased edible oil from various registered dealers inside the State of Tamil Nadu. 47. The dealers therein who sold edible oil to the petitioner therein were exempted from payment of tax. The petitioner therein (also a dealer) was therefore called upon to pay purchase tax under Section 7A of the TNGST Act, 1959. 48. There, it was argued that Section 7A of the TNGST Act, 1959 can operate only in cases where there is no liability. It was also submitted that Section 7A of the TNGST Act, 1959 was introduced as an anti-tax evasion measure. It was argued that an exempted sale by no logic carries with it the stamping of e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e purchaser is made liable to tax. 54. In the context of Section 7-A of the Tamil Nadu General Sales Tax Act, 1959, the Tamil Nadu Government has also issued a clarification dated 24.12.1999 bearing reference D.Dis.Acts Cell I I/75893/99. The text of the clarification reads as under:- TURMERIC IN THE FORM OF BALLS, FINGER AND POWDER The stock transfer of turmeric to other States is liable to purchase tax under Section 7-A if it is purchased from unregistered dealers within the State. The purchase tax under Section 7-A is leviable only if the total turnover of the dealer under the TNGST Act exceeds Rs. One hundred crores in a year. The exemption granted in the 3rd schedule is not a general exemption but conditional. The sale of turmeric by a dealer whose turnover exceeds ₹ 100 crores per year does not fall under 3rd schedule. Since there is no other entry in the schedule, such dealers are liable to pay tax at 11% under entry 67 of part D of the 1st schedule. Turmeric in any form such as balls, fingers and powder continue to be the same commodity if tax was paid in one stage, the subsequent change in form will not attract sales tax since it is only of the tax suf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he present case is under the provisions of the Tamil Nadu Value Added Tax Act, 2006. 62. Though under Section 88(3)(i) of the Tamil Nadu Value Added Tax Act, 2006, clarification issued under the provisions of the TNGST Act, 1959 continue to be force unless are cancelled or are inconsistent with the provisions of the Act. Therefore, the impugned orders cannot be set aside and the case be remanded back to the original authority merely because under an identical situation the Division Bench had earlier relegated the parties to alternate remdey with few observations. 63. A solitary view taken by a single judge of this Court in a Batch of W.P(MD).No.11425 of 2016 vide common order on 6.12.2018 in the case of M/s. NVR Co. Vs The Asst. Commissioner (CT) Virudhnagar and others in the context of Section 12 of the Tamil Nadu Value Added Tax Act, 2006 upholding the demand under similar circumstances has also been set aside by a Division Bench of the Madurai High Court in W.A (MD) No.557 of 2019 in its order dated 31.10.2019 . A similar order passed in W.A (MD) No.558 of 2019 8.11.2019 arising out of the common order of the learned single judge. 64. The learned single ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 7-A of the Tamil Nadu General Sales Tax Act, 1959. Section 12 of the Tamil Nadu Value Added Tax Act, 2006. Levy of Purchase Tax. 1. Subject to the provisions of sub-Section (1) of Section 3, every dealer who in the course of his business purchases from a registered dealer or from any other person, any goods, (the sale or purchase of which is liable to tax under this Act) in circumstances in which [no tax is payable under Section s 3 or 4, as the case may be, [not being a circumstance in which goods liable to tax under sub-Section (2) of Section 3 or Section 4, were purchased at a point other than the taxable point specified in the First, or the Second Schedule and either, (a) [consumes or uses such goods in or for the manufacture of other goods for sale or otherwise; or] (b) disposes of such goods in any manner other than by way of sale in the State, or (c) despatches or carries them to a place outside the State except as a direct result of sale or purchase in the course of inter- State trade or commerce, shall pay tax on the turnover relating to the purchase afo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, 1959 was to be read along with Section 8 of the TNGST Act, 1959. Similarly, Item 18, Part B IV Schedule to the Tamil Nadu Value Added Tax Act, 2006 has to be read along with and Section 15 of the said Act, 2006. Though they gave to dealers of the goods enumerated therein exemption from payment of tax upto ₹ 300 Crores, yet the consequence under the respective enactments are different as far as levy of purchase tax are concerned. Both the Items are reproduced below for comparison:-. ITEM: 16, III Schedule to the TNGST Act, 1959 ITEM: 18, Part B IV Schedule to the Tamil Nadu Value Added Tax Act, 2006. Chilies, tamarind, coriander and turmeric and shikakai sold by any dealer whose turnover in respect of these items does not exceed ₹ 300 crores in a year*. Chillies and chilly powder, coriander and coriander powder, turmeric and turmeric powder, shikakai and shikakai powder, tamarind and asafetida (Hing) sold by any dealer whose total turnover in respect of those item does not exceed rupees 300 crores in a year. *(Shikakai powder was exempt from tax in terms of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Thus, there was a paradigms shift from TNGST Act, 1959 when Tamil Nadu Value Added Tax Act, 2006 was enacted. The tax regime was altered to levy tax on value addition at every point of sale with a within the State with a corresponding provision for input tax credit for being set off. It not only rationalised the rate of tax but also rendered tax paid at every point of sale within the State to be set off as input tax credit. 81. Thus, the reasons given in Ruchi Soya Industries Case in the context of Section 7A of the TNGST Act, 1959 to uphold the levy of purchase tax is not applicable to levy under Section 12 of the Tamil Nadu Value Added Tax Act,2006. 82. I am therefore of the view, that under Section 12(1) of the Tamil Nadu Value Added Tax Act, 2006, petitioner who is also a dealer is liable to pay purchase tax at the rate specified in the Schedules. 83. To the extent the petitioner had purchased turmeric from dealers who were eligible for exemption under Section 15 Read with Item 18, Part B, IV to the Tamil Nadu Value Added Tax Act, 2006, levy under Section 12(1) of the Tamil Nadu Value Added Tax Act, 2006 is attracted at rates specified in the Schedules to the Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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