TaxTMI 
TaxTMI 
2020 (5) TMI 494
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....he impugned order has also imposed with penalty under Section 27(3)(c) of the Tamil Nadu Value Added Tax Act, 2006 on the petitioner. 5. The petitioner, a dealer of turmeric had locally purchased turmeric from various registered/unregistered dealers without payment of tax as their turnover were reportedly below Rs. 300 crores during the respective assessment year and were therefore exempted under Section 15 read with Item 18, Part B, 4th Schedule of the of the Tamil Nadu Value Added Tax Act, 2006. 6. The purchased stock were transferred stock by the petitioner to its branches outside the State of Tamil Nadu for branding, packing and labelling and other activities and were purportedly sold from there on payment of tax. 7. Regular assessments for the respective assessment years were completed earlier. Thereafter, assessment orders were reopened under Section 22 of the Tamil Nadu Value Added Tax Act, 2006 pursuant to an investigation by the Commercial Tax Department on the ground that the petitioner had failed to pay purchase tax under Section 12(1) of the Tamil Nadu Value Added Tax Act, 2006. These proceedings culminated in the impugned order of the respondent wherein the petition....
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....er Section 12(1) of the Tamil Nadu Value Added Tax Act, 2006 was available by way of Input Tax Credit under Section 12(2) read with Section 19(3)(c) of the Act. 16. It is therefore contended that since input tax credit is available under Section 19 of the Tamil Nadu Value Added Tax Act, 2006 read with Tamil Nadu Value Added Tax Rules, 2007 and since the petitioner is in a peculiar situation and is unable to utilise such Input Tax Credit in absence of local sales, it should be granted refund. It is therefore submitted that the issue being revenue neutral, the petitioner was entitled to the relief in W.P.No.21982 of 2016. The petitioner relied on the decision of this court and that of the the Hon'ble Supreme Court in the following cases:- i. KG Denim Ltd versus CESTAT 2017 (7) GSTL 442; ii. CCE versus Coca-Cola India Private Limited 2017 (213) ELT 490 (SC);and iii. Commissioner of Customs and Central Excise versus Textile Corporation Marathwada 2008 (231) ELT 195 (SC). 17. In this connection reliance was also placed on the decision of the Hon'ble Supreme Court in Formica India Division versus Collector of Central Excise 1995 (77) ELT 501 wherein benefit of all exempti....
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....hat if those components are not clear and definitely ascertainable, it is difficult to say that the levy exist in point of law. 25. It is submitted that any uncertainty or vagueness in the legislative scheme defining any of those components of the levy will be fatal to its validity. 26. It was submitted that levy of purchase tax under Section 12(1) of the Tamil Nadu Value Added Tax Act, 2006 was vague and therefore the demand was not sustainable. 27. He further submits that tax administration is a complex objects and consists of several aspects. The government is therefore required to strike a balance while imposing tax for collection of revenue with a business friendly approach. It is submitted that interpretation of a tax entry being a quasi-judicial function, the Government invariably works through its senior officers in the matter of difficulties which the business may face, particularly in matters of tax administration. 28.Learned Counsel therefore drew attention to the decision of the Hon'ble Supreme Court in State of Kerala Versus Kurian Abraham Private Limited and Another (2008) 3 SCC 582 which recognised the role of the Board of Revenue. 29. The learned Counsel fo....
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....tariff entry, resort cannot be had to residuary item. 38. The respondent has filed a separate counter in W.P No. 21982 of 2016 and a common counter in W.P.No.21983 to 87 of 2016. It is submitted that these writ petitions were without merit and were therefore liable to be dismissed. 39. It is submitted that the place of business of the petitioner was inspected on 6.3.2015 and on the basis of inspection materials, revision notices were issued to the petitioner which culminated in the impugned order. 40. It is submitted that charge under Section 3(2) of the Tamil Nadu Value Added Tax Act, 2006 remains untouched by charge under Section 12(1) of the Tamil Nadu Value Added Tax Act, 2006 and exemption upto Rs. 3 crore available to a local dealer effecting local sale cannot be extended to the petitioner as the two levies i.e under Section 3 and Section 12 of the Act are different levies and therefore cannot be confused with each other. 41. It is further submitted that the decision of this court in Ruchi Soya referred to supra by the learned counsel for the petitioner does not in any manner further the case of the petitioner. 42. The learned counsel for the respondents relied on....
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.... Act, 1959 was introduced as an anti-tax evasion measure. It was argued that an exempted sale by no logic carries with it the stamping of evasion of tax to fit in with the purpose for which the aforesaid provision was introduced and hence invocation of Section 7A would nullify the exercise of power given under Section 17 of the TNGST Act, 1959. 49. The Division Bench of this court in Ruchi Soya Industries Ltd. did not accept the above argument. It observed that Section 7A does not give any room for such course of interpretation. Section 3,4 and 7A of the Section 7A of the TNGST Act, 1959 were held to be independent charging Sections. 50. It was further held that Section 7A of TNGST,1959 comes into play where the purchase of goods is liable to tax but does not suffer tax in the circumstances and are dealt with in the manner stated. It was further held that since 2nd sale was exempted from sales tax under the provisions of the TNGST Act, 1959 and such a dealer may sell the goods inside the State again or sell the same as inter-state sale or dispatch them to outside the State as consignment or branch transfer. Any manner of dealing with tax suffered sales as prescribed under ....
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....ity if tax was paid in one stage, the subsequent change in form will not attract sales tax since it is only of the tax suffered commodity." 55.The above circular was further modified by another clarification dated 4.10.2009 bearing reference No. 91/2000 D.Dis.Acts Cell II/52300.Relevant portion of it read as under:- Turmeric finger/powder with no ingredients, chilly whole/powder with no ingredients, cumin seeds/powder with no ingredients, fennel seeds/powder with no ingredients, black pepper/whole/powder with no ingredients- The sale of the above 5 items by a dealer whose total turnover in a year is less than Rs. 300 crore is not liable to tax under Item 16 in Part B of the 3 rd Schedule to the T.N.G.S.T Act, 1959 is eligible for exemption from tax. (to check) 56. As mentioned above, the above clarifications of the Government of Tamil Nadu was considered by a Division Bench of this court in Hotel Shri Kannan versus State of Tamil Nadu [2007] 8 VST 97 (Madras). 57. The Division Bench of this court there had set aside the assessment orders impugned therein as the orders were passed without reference to the above clarification. 58. The above clarification was issue....
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....ing out of the common order of the learned single judge. 64. The learned single judge was influenced by the decision of the Hon'ble Division Bench in the case of Ruchi Soya Industries and the decision of the Hon'ble Supreme Court in K.N.Kandaswami case (2015)15S CC 98 and accepted the views of the commercial tax department that there was a larger object behind incorporation of Section 12 of the Tamil Nadu Value Added Tax Act, 2006 to ensure that the State will not lose its revenue atleast at one stage. 65. The Hon'ble Division Bench however set aside the said order on the existence of alternate remedy by asking the petitioner to file an appeal taking note of the observation made in order passed in W.A (MD) No. 557 of 2019. In W.A (MD) No. 557 of 2019 though in paragraph 17 of the said order it was observed that "......In any event we have held that the writ petitions were premature, we have to necessarily vacate the findings rendered by the learned single judge on the taxable issue leaving it open to the Assessing Officer to consider the individual case of the dealers individually and independently". There appears to be some inconsistency between the above observation in para....
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....ed in [Section s 3 or 4], as the may be. Levy of Purchase Tax. (1) Subject to the provisions of sub- Section (1) of Section 3, every dealer, who in the course of his business purchases from a registered dealer or from any other person, any goods (the sale or purchase of which is liable to tax under this Act), in circumstances in which no tax is payable by that registered dealer on the sale price of such goods under this Act, and either- (a) consumes or uses such goods in or for the manufacture of other goods for sale or otherwise; or (b) disposes of such goods in any manner other than by way of sale in the State; or (c) despatches or carries them to a place outside the State except as a direct result of sale or purchase in the course of inter-State trade or commerce or in the course of export out of the territory of India; or (d) installs and uses such goods in the factory for the manufacture of any goods, shall pay tax on the turnover relating to the purchase aforesaid at the rate specified in the Schedules to this Act. (2) Notwithstanding anything contained in clause (24) of Section 2, the dealer who pays tax under sub-Section (1) shall be entitled to input tax credi....
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....gh the levy under Section 7A of the TNGST Act, 1959 and 12 of the Tamil Nadu Value Added Tax Act, 2006 get attracted under similar circumstances, the rate of tax are different. 74. Under Section 7A of the TNGST Act, 1959 tax is payable at the rate prescribed in Section 3 and 4 of the said Act. Where as, under Section 12 of the Tamil Nadu Value Added Tax Act, 2006 tax is payable at the rate specified in the Schedules to the Act. Therefore, the Petitioner would be liable to pay tax only at the rate specified in the Schedules to the Tamil Nadu Value Added Tax Act, 2006 . 75. Normally, a dealer is liable to pay tax on the sale and pass on the incidence of such tax to the dealer/consumer who purchases such goods. If the goods are purchased by registered dealer within the State, such dealer would be entitled to input tax credit under Section 19 of the Tamil Nadu Value Added Tax Act, 2006 read with Rule 10 of the Tamil Nadu Value 76. If the taxable goods do not suffer tax at the time of purchase for the reasons stated in Section 12 of the Tamil Nadu Value Added Tax Act, 2006, the dealer who purchases such goods is liable to pay tax on the turnover relating to the aforesaid purch....
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.... the Tamil Nadu Value Added Tax Act, 2006, the levy under Section 12 of the Tamil Nadu Value added Tax Act, 2006 is not attracted if the petitioner's turn over was also below Rs. 300 Crores during the ear. This would require verification. 85. Further, Section 12(1) is subject to Section 3(1) of the Tamil Nadu Value Added Tax Act, 2006. Therefore, to the extent the petitioner had purchased turmeric from a dealer whose total turnover for the year was less than Rs. 5lakhs, purchase tax under Section 12(1) of the Tamil Nadu Value Added Tax Act, 2006 is not attracted as such purchase will be outside the purview of purchase tax under Section 12(1) of the Tamil Nadu Value Added Tax Act, 2006. 86. In my view, the phrase "rates specified in the Schedules to this Act" in Section 12(1) of the Tamil Nadu Value Added Tax Act, 2006 would include the rates in both the entries namely Item 52, Part B, I Schedule and Item 18, Part B, IV Schedule to the Tamil Nadu Value Added Tax Act, 2006. 87. If the total turnover of the petitioner during the relevant year did not exceed Rs. 300 crores as per Section 12(1) of the Tamil Nadu Value Added Tax Act, 2006 the Tax payable by the petitioner w....