2021 (7) TMI 342 - HC - VAT and Sales Tax

Healthcare institution urged to exhaust appellate remedies before pursuing judicial review under TNVAT Act

The Court advised the petitioner, a healthcare institution challenging VAT payment demands under the TNVAT Act, to pursue appeals before appropriate ... Seeking Exemption from VAT - petitioner- Institution is falling under the definition of “dealer” or not - Explanation (iii) to Section 2(15) of the TNVAT Act - HELD THAT:- This Court is of the considered opinion that the contention of the petitioner for grant of consumption is also well defended by the respondents. However, certain facts if at all the petitioner is of the opinion were not considered by the respondents in the impugned order, the said order is to be taken by way of an appeal before the appellate authority. The act provides an appeal to the Appellate Deputy Commissioner under Section 51 of the TNVAT Act. Section 58 provides appeal to the Appellate Tribunal and thereafter, the appeal or revision before the High Court under Sections 59 or 60 as the case may be. When the statutory remedies are available to the petitioner to redress the grievances with reference to certain facts as well as the legal grounds raised, it is not appropriate on the part of the High Court to adjudicate such issues in the absence of documents and material evidences. In the present case, the petitioner is claiming certain benefits by interpreting the provisions of the TNVAT Act and based on certain facts - However, the facts are distinguished by the respondents and they are not disputing the exemption granted with reference to the medical equipments. Petition disposed off. Issues:Challenge to VAT payment demand under TNVAT Act based on exemption claims.Analysis:1. The petitioner, an institution providing healthcare services, challenged the demand for VAT payment under the TNVAT Act in a writ petition. The institution's establishment and services were acknowledged, but the issue centered around the payment of Sales Tax under the TNVAT Act.2. The petitioner contended that they were exempted from Sales Tax based on orders from the Tamil Nadu Sales Tax Appellate Tribunal in 1976. The Tribunal had observed that the institution was not a dealer and not engaged in business, thus questioning the liability for tax on miscellaneous goods sales.3. The petitioner argued that subsequent orders by the Commissioner of Commercial Taxes and the Government granted exemptions, making the current demands contrary to previous decisions. The petitioner claimed that the institution did not fall under the categories specified in the TNVAT Act for tax liability.4. The respondents, represented by the Government Counsel, asserted that the institution fell under the definition of a 'dealer' as per Section 2(15)(iii) of the TNVAT Act concerning auctioning activities. They differentiated between exemptions granted for miscellaneous articles and taxable items like metal scraps, waste paper, etc.5. The Government Counsel highlighted changes in the law post the Tribunal's 1976 orders, emphasizing that the institution's activities now fell under the dealer category. They argued that the institution's exemption did not cover items like metal scraps, leading to the imposition of Sales Tax.6. The Court emphasized the availability of statutory appeal mechanisms for addressing grievances regarding tax demands. It stressed the importance of exhausting appellate remedies before approaching the High Court for judicial review, as appellate authorities are final fact-finding bodies.7. The Court concluded that the petitioner should pursue appeals before the appropriate authorities to address tax-related disputes effectively. It advised the petitioner to follow due procedures and present grievances with supporting evidence for a fair resolution.8. The Writ Petition was disposed of with no costs, emphasizing the need for the petitioner to utilize the appellate process for redressal. The judgment highlighted the importance of adhering to statutory procedures and allowing the appellate authorities to address factual and legal disputes comprehensively.