Court quashes orders, upholds exemption for coriander & turmeric powder. Section 27 proceedings void.

The court allowed the writ petitions, quashing the impugned orders and holding that the exemption for coriander powder and turmeric powder continued during the period from 1.1.2007 to 31.3.2008. The proceedings under Section 27 of the Act were found to be without jurisdiction and were set aside.

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Issues Involved:
1. Exemption of coriander powder and turmeric powder under Tamil Nadu Value Added Tax Act, 2006.
2. Validity of invoking Section 27 of the Tamil Nadu Value Added Tax Act, 2006 for assessment of escaped turnover.
3. Effect of substitution in the Fourth Schedule by Act 32/2008.
4. Maintainability of writ petitions despite alternative remedy.

Issue-wise Detailed Analysis:

1. Exemption of Coriander Powder and Turmeric Powder:
The petitioners argued that coriander powder and turmeric powder should be exempt from tax under the Tamil Nadu Value Added Tax Act, 2006 (Act 32/2006) based on historical treatment under the Tamil Nadu General Sales Tax Act, 1959 (TNGST Act) and subsequent clarifications. The court noted that under the TNGST Act, these powders were treated as exempt goods, and this understanding was carried forward under Act 32/2006. The government, through G.O.(D) No.383 and a clarification dated 9.12.2002, had consistently treated the powders as the same goods as their whole counterparts, thus exempt from tax. The court held that there is no differentiation between turmeric and turmeric powder, and coriander and coriander powder, based on the Full Bench decision of the Kerala High Court in Namputhiris Pickle Industries v. State of Kerala, which was upheld by the Supreme Court. Therefore, the powders should continue to enjoy the benefit of exemption.

2. Validity of Invoking Section 27 for Assessment of Escaped Turnover:
The court addressed the petitioners' argument that no original assessment orders were passed, and therefore, invoking Section 27 of Act 32/2006 for escaped assessment was invalid. The court agreed, citing the Division Bench decision in M.Kandasami v. The Registrar, Tamil Nadu Taxation Special Tribunal, which held that escapement of assessment presupposes an original assessment. Since no original assessment was made, the proceedings under Section 27 were without jurisdiction and invalid.

3. Effect of Substitution in the Fourth Schedule by Act 32/2008:
The court examined whether the substitution of Serial No.18 in the Fourth Schedule by Act 32/2008 should have retrospective effect from 1.1.2007. The court relied on the Supreme Court decision in Government of India v. Indian Tobacco Association, which held that substitution should be interpreted as having retrospective effect, replacing the old entry from the inception of the Act. The court concluded that the substitution in Serial No.18 was intended to correct an omission and should be effective from 1.1.2007, thus maintaining the exemption for coriander and turmeric powders during the period from 1.1.2007 to 31.3.2008.

4. Maintainability of Writ Petitions Despite Alternative Remedy:
The court considered the preliminary objection regarding the availability of an alternative remedy by way of appeal. It held that since the impugned proceedings were without jurisdiction (due to the lack of original assessment), the plea of alternative remedy could be ignored. The court emphasized that when the challenge is to the jurisdiction of the authority itself, the writ petitions are maintainable.

Conclusion:
The court allowed the writ petitions, quashing the impugned orders and holding that the exemption for coriander powder and turmeric powder continued during the period from 1.1.2007 to 31.3.2008. The proceedings under Section 27 of Act 32/2006 were found to be without jurisdiction and were set aside.

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