2022 (10) TMI 956 - HC - VAT and Sales Tax

Court sets aside Sales Tax Appellate Tribunal's orders on additional sales tax under Tamil Nadu Act.

Tvl. The Dharmapuri District Co-operative Sugar Mills Limited, rep. by the Special Officer Versus The State of Tamil Nadu, rep. by the Secretary, Department of Commercial Taxes and Religious Endowments, The Tamil Nadu Sales Tax Appellate Tribunal, rep. by its Secretary, (Additional Bench), Coimbatore, The Commercial Tax Officer

The Court ruled in favor of the Petitioners, setting aside the Sales Tax Appellate Tribunal's orders regarding the additional sales tax under the Tamil ... Levy of additional sales tax under the provisions of Section 2(a) of the Tamil Nadu Additional Sales Tax Act, 1970 - amendment to Section 2 of the Tamil Nadu Additional Sales Tax Act, 1970 vide amendment in the year 1996, w.e.f. 01.08.1996 - HELD THAT:- In the case of THE STATE OF TAMIL NADU, REP. BY THE JOINT COMMISSIONER (CT) , COIMBATORE VERSUS TVL. BANNARI AMMAN SUGARS LIMITED [2018 (1) TMI 1698 - MADRAS HIGH COURT], though it has been concluded that, the Sales Tax Appellate Tribunal has rightly held that, additional sales tax cannot be levied, since the taxable turnover for the whole year was determined as Rs.43,03,53,904/-, which is below Rs.100 crores in a year, there is no discussion as to why the other two decisions rendered in the cases of PHILIPS INDIA LIMITED VERSUS ASSISTANT COMMISSIONER (CT), FAST TRACT ASSESSMENT CIRCLE II, AND OTHERS [2004 (5) TMI 538 - MADRAS HIGH COURT] National Time Company [2010 (7) TMI 842 - MADRAS HIGH COURT] stand dissented. The case remanded back to the original Authority to reconsider the demand of additional sales tax under the provisions of the Tamilnadu Additional Sales Tax Act, 1970 - the Respondent Authority are directed to complete the reassessment and pass appropriate orders within a period of three months from the date of receipt of a copy of this order. Issues involved:Challenging impugned orders by Sales Tax Appellate Tribunal, interpretation of Tamil Nadu Additional Sales Tax Act, 1970, impact of amendment in 1996, applicability of additional sales tax, validity of Tribunal's decision, reliance on previous judgments, remand for reconsideration.Analysis:1. The Writ Petitioners contested orders by the Sales Tax Appellate Tribunal regarding the additional sales tax under the Tamil Nadu Additional Sales Tax Act, 1970. The Tribunal found the Petitioners liable for the tax based on the provisions of Section 2(a) of the Act during the disputed period.2. The crux of the dispute lies in the amendment to Section 2 of the Act in 1996, specifically the change in the levy of additional tax for certain dealers. The Tribunal's decision was influenced by this amendment, leading to the demand for additional sales tax from the Petitioners.3. The Tamilnadu Taxation Special Tribunal previously addressed the constitutionality of the amendment, ultimately striking it down as ultra vires the Constitution. This decision prompted the State Government to accept the ruling and issue a Government Order in compliance with the Tribunal's directive.4. The Petitioners argued that the amendment should be applied uniformly for all dealers and that their turnover during the relevant assessment year was below the threshold for levying additional sales tax, emphasizing the principle of one year for Section 2(a) of the Act.5. Legal counsels for both sides referenced past judgments, including the case of State of Tamilnadu vs. Tvl. Bannari Amman Sugars Limited, to support their respective positions on the applicability of the additional sales tax under the amended Act.6. The Court considered the arguments presented by both parties and examined the impact of the amendment in light of previous decisions, notably the cases of Philips India Limited and National Time Company, which provided guidance on the interpretation and application of the Act.7. Ultimately, the Court ruled in favor of the Petitioners, setting aside the Tribunal's orders and remanding the case for reassessment by the original Authority. The reassessment was directed to be completed within three months, adhering to the legal principles established in the aforementioned judgments.This comprehensive analysis of the judgment delves into the intricacies of the legal issues involved, the interpretation of statutory provisions, and the precedents that influenced the Court's decision to remand the case for reconsideration based on established legal principles.