Dismissal of Writ Petitions Challenging TNVAT Purchase Tax Notice Upheld, Petitioners Directed to Submit Objections

The High Court of Madras dismissed the writ petitions challenging a notice issued under Section 12 of the TNVAT Act for the levy of purchase tax on Turmeric and Turmeric Powder purchases. The Court deemed the petitions premature, directing the petitioners to submit objections within 15 days. Emphasizing the need for adjudication of disputed facts, the Court upheld the respondent's jurisdiction to issue the notices and instructed a reasoned order post objections.

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Issues:
Challenge to notice issued under Section 12 of TNVAT Act for levy of purchase tax on Turmeric and Turmeric Powder purchases without tax payment.

Analysis:

1. Issue of Notice under Section 12 of TNVAT Act:
- The petitioners, traders of Turmeric and Turmeric powder, challenged a notice issued by the respondent under Section 12 of the TNVAT Act for the levy of purchase tax on goods purchased without tax payment. The petitioners contended that they were entitled to benefit under past clarifications until withdrawn prospectively.

2. Interpretation of TNVAT Act and Circulars:
- The petitioners argued that the proposed levy of purchase tax was illegal and contrary to the provisions of the Act and circulars issued by the Department. They relied on a Division Bench decision that deemed the levy of purchase tax on Turmeric and Turmeric Powder as illegal.

3. Applicability of Tax Provisions:
- The respondent contended that the purchases made by the petitioners from unregistered dealers and sent outside the state for consignment sale were liable for tax under Section 12(1)(c) of the TNVAT Act. The respondent highlighted that the exemption was conditional and not fully applicable as claimed by the petitioners.

4. Judicial Interpretation and Precedents:
- The respondent cited judicial precedents to support the levy of purchase tax on goods sent outside the state for consignment sale. It was argued that the goods being taxable with conditional exemption, the proposed tax under Section 12 of the TNVAT Act was valid.

5. Court's Decision:
- The Court dismissed the writ petitions as premature, directing the petitioners to submit objections to the notices within 15 days. The Court emphasized that the issue involved disputed facts and required adjudication, urging the petitioners to present all contentions during the objection process. The Court upheld the respondent's jurisdiction to issue the notices and instructed a reasoned order to be passed post objections.

In conclusion, the High Court of Madras dismissed the writ petitions as premature, instructing the petitioners to submit objections to the notices within 15 days. The Court emphasized the need for adjudication of disputed facts and legal contentions, allowing the respondent to pass a reasoned order post objections.

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