TMI Blog2022 (8) TMI 57X X X X Extracts X X X X X X X X Extracts X X X X ..... officials found to have led to a suspicion of undervaluation either - In the discussion, the authority states that the pricing arrived at by a manufacturer should take into account expenses on advertisement, promotion and transport, royalty and other expenses that would have an impact upon the cost of production. The petitioner has admittedly received royalty from the use of the brand 'VKC' and according to it, the royalty as well as the expenses enumerated by the officer have been taken into account by it, in arriving at the pricing. The petitioner is right in stating that apart from general observation on how proper is to be arrived at, there is nothing brought on record by the officer to support a conclusion that such factors have not been taken into account in arriving at the pricing. There is no scientific assessment of the pricing itself set out in support of the conclusion that relevant parameters to determine fix/pricing have been omitted, thus, leading to a conscious undervaluation. There is an apprehension in the minds of the authorities that the fixation of the prices is abnormal, perhaps for the reason that all the footwear have been priced at sums less th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dents, revealed certain fallacies and flaws in the pricing mechanism adopted by the petitioners. Prima facie, the officials of the Enforcement Department appear to have been of the view that the petitioner has undervalued its products and consequently the pricing so as to avail the benefit of statutory exemption that it claims. 3.To be noted that Entry-30/Part B/Schedule-IV of the Tamil Nadu Value Added Taxes Act, 2006 (in short 'Act') exempts turnover from the sale of footwear, where each pair of the footwear is priced at less than Rs.200/-. Since the petitioner has priced the pairs at less than Rs.200/-, this has triggered a suspicion in the minds of the revenue that the prices have been tampered so as to bring them within the cover of the exemption. 4.For the purposes of this order, W.P.No.12997/2019, in the case of VKC Footcare (India) Pvt. Ltd. Vs The State Tax Officer, is taken to be the main Writ Petition and the dates, facts and circumstances in this Writ Petition are alluded to for the sake of clarity. 5.Both Mr.N.Inbarajan, learned counsel appearing for the petitioners and Mr.Haja Nazirudeen, learned Additional Advocate General appearing for Mr.R.Siddhart ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on under Section 24 of the TNVAT Act, 2006 S.No. Party Name W.P.No. Assessment Year Deemed Assessment Limitation under Section 24 Date of Revision of notice Date of Final Order 1. VKC Footcare India 12997/2019 2010-11 VAT 31.03.2011 31.03.2016 20.09.2018 09.04.2019 2. VKC Footcare India 12999/2019 2011-12 VAT 31.03.2012 31.03.2017 20.09.2018 09.04.2019 3. VKC Footcare India 13002/2019 2012-13 VAT 31.03.2013 31.03.2018 20.09.2018 09.04.2019 4. VKC Footprint Global 12966/2019 2012-13 VAT 31.03.2013 31.03.2018 20.09.2018 11.04.2019 Limitat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1021GENTS 287376 195 215 329.9 10.26 53.44 69.18 20 114.9 134.9 1022GENTS 8880 190 209 319.9 10.00 53.06 68.37 19 110.9 129.9 1010GENTS 3144 180 198 299.9 10.00 51.46 66.61 18 101.9 119.9 1121GENTS 2112 176 194 269 10.23 38.66 52.84 18 75 93 125LADIES 7110 162 178.5 249 10.19 39.50 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 48.9 1038GENTS 358344 151 162.5 199.9 7.62 23.02 32.38 11.5 37.4 48.9 1039GENTS 46464 151 162.5 199.9 7.62 23.02 32.38 11.5 37.4 48.9 2003GENTS 12384 151 162.5 199.9 7.62 23.02 32.38 11.5 37.4 48.9 111LADIES 129660 144 158 219.5 9.72 38.92 52.43 14 61.5 75.5 107LADIES 139920 141 155 214 9.93 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 64.9 106LADIES 50190 134 147 198.9 9.70 35.31 48.43 13 51.9 64.9 103BOYS 30450 134 147 198.9 9.70 35.31 48.43 13 51.9 64.9 101LADIES 30150 128 140 194.9 9.38 39.21 52.27 12 54.9 66.9 103LADIES 39330 128 140 194.9 9.38 39.21 52.27 12 54.9 66.9 901LADIES 720 75.5 83 114.9 9.93 38.43 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of the prices at every stage of sale, manufacturer/wholesaler/retailer. Such differences however, may well arise on account of the costs incurred at each stage and the profit margin of each of the entities. 18. The provisions of Section 24 of the Act provide for exactly the situation that arises in the present case, and read as follows: 1. Assessment of sales shown in accounts at low prices: (1) If the assessing authority is satisfied that a dealer has, with a view to evade the payment of tax, shown in his accounts, sales or purchases of any goods, at prices which are abnormally low compared to the prevaling market price of such goods, it may, at any time within a period six years from the expiry of the year to which the tax relates, assess or re-assess the dealer to the best of its judgment on the turnover of such sales or purchases after making such enquiry as it may consider necessary and after giving the dealer a reasonable opportunity to show cause against such assessment. (2) The provisions of sub-sections (3) to (8) of Section 27, shall, as far as may be, apply to assessment or reassessment under sub-section (1) as they apply to the reassessment of esc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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