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of <h1>Tax Levy Quashed: Court Rules No Jurisdiction Under Tamil Nadu VAT Act for DEPB Sales Completed in Maharashtra.</h1> <h3>Devi Marine Food Export Pvt. Ltd., Versus Assistant Commissioner (CT) (Addl.) Chennai</h3> Devi Marine Food Export Pvt. Ltd., Versus Assistant Commissioner (CT) (Addl.) Chennai - TMI Issues:Jurisdiction to levy tax on sale of Duty of Entitlement Pass Book (DEPB) completed in Maharashtra.Analysis:The petitioner challenged the re-opening of their assessment for the financial year 2007-08 regarding the levy of tax on a turnover related to the sale of DEPB. The respondent claimed jurisdiction to levy tax since the exports were transacted in Chennai, implying the transfer of DEPB credit had to be in Tamil Nadu. However, the petitioner argued that the DEPB was issued and delivered in Mumbai, with the sale completed in Maharashtra, where Maharashtra VAT was paid. The petitioner contended that the respondent lacked jurisdiction to levy tax on the sale of DEPB.The DEPB scheme aims to neutralize customs duty on the import content of export products by granting duty credit against the export product. The petitioner received DEPB under the MVAT Act in Mumbai, and the sale and delivery of the pass book occurred in Maharashtra. Section 2(33) of the Tamil Nadu Value Added Tax Act limits tax levy on sales occurring outside Tamil Nadu. The petitioner's right to claim set-off originated in Maharashtra, where the DEPB was granted and delivered, and where the petitioner was subjected to sales tax.The court referred to previous judgments to support its decision. In Premier Marine Products vs. The Assistant Commissioner (CT), Chennai, the court held that the turnover from the transaction involving DEPB, located in Bombay with the seller and buyer, is liable to tax only in Maharashtra. The court also cited Yasha Overseas case, stating that both DEPB and REP licenses are subject to sales tax. The court rejected the Revenue's argument that the petitioner's export-import operations through Tuticorin Port established Tamil Nadu's nexus, finding it insufficient for tax imposition in Tamil Nadu.The court distinguished between tangible and intangible assets, emphasizing that the DEPB, a tangible asset, was reduced to a passbook, constituting specified goods. It rejected the Revenue's argument by citing cases involving intangible goods reduced to physical form, clarifying that once in a physical commodity form, assets are ascertained goods for sales tax purposes. Consequently, the court ruled that the respondent lacked jurisdiction to levy tax on the sale of DEPB completed in Maharashtra, quashing the tax levy and the impugned order.In conclusion, the court allowed the writ petition, quashed the impugned order related to the tax on the turnover from the sale of DEPB, and closed the connected miscellaneous petition without costs.
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