Turnover threshold controls VAT liability, and an assessment based on purchase value was quashed despite an available appeal.

Liability under the Tamil Nadu VAT framework depended on the statutory turnover threshold, not merely on purchase value. The court noted that the dealer's sales turnover remained below the prescribed limit, so assessment on the basis of purchase value was inconsistent with the statutory scheme and lacked jurisdiction on the applicable legal criterion. The availability of an appellate remedy did not bar interference where the impugned order was legally unsustainable. On that basis, the assessment was set aside and the writ petition succeeded.

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Issues: Whether the assessing authority could determine liability under Section 3(4) of the Tamil Nadu Value Added Tax Act, 2006 on the basis of purchase value when the dealer's sales turnover was below the statutory threshold, and whether the availability of an appellate remedy warranted refusal to interfere.

Analysis: Section 3(4)(a)(ii) permits the relevant option and liability to be tested with reference to turnover relating to taxable goods, and the statutory threshold is fixed at rupees fifty lakhs. The dealer's sales were only Rs. 35,06,220, which remained below that limit. On those facts, assessment based on purchase value was inconsistent with the statutory scheme. The existence of an appellate remedy under Section 51 did not preclude interference where the order was found to suffer from lack of jurisdiction on the applicable legal criterion.

Conclusion: The assessment based on purchase value was unsustainable, and the order was liable to be set aside.

Final Conclusion: The writ petition succeeded and the impugned assessment was quashed.

Ratio Decidendi: For liability under Section 3(4) of the Tamil Nadu Value Added Tax Act, 2006, the relevant criterion is the statutory turnover threshold, and an assessment founded on an impermissible basis is liable to be interfered with despite the availability of an appeal.

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