2026 (9) TMI 1106

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....2020. By the impugned order, the learned Single Judge allowed the writ petition filed by the respondent/dealer and set aside the assessment order dated 4.9.2020, to the extent that it denied the benefit of the composition scheme under Section 3(4) of the Tamil Nadu Value Added Tax Act, 2006 (for brevity "the Act") and levied tax at the higher rate of 14.5%. 2.1. The background facts leading to the present appeal are summarized as under: The respondent is a registered dealer engaged in retail sales of cycle parts, two-wheeler spare parts, tires, and tubes. For the assessment year 2014-15, the respondent opted to pay tax under the composition scheme governed by Section 3(4) of the Act. Under this provision, small dealers whose taxable turn....

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.... turnover for the entire financial year was calculated and verified to be Rs. 37,28,468/-. 2.5. Upon considering the dealer's reply and financial statements, the Assessing Authority accepted the financial figures and officially redetermined the total and taxable turnover for the assessment year 2014-15 at Rs. 37,28,468/-. However, despite accepting a turnover figure well below the statutory limit of Rs. 50,00,000/-, the Assessing Authority refused to apply the 0.5% compounding rate. Instead, the authority levied tax at the full schedule rate of 14.5%, on the premise that the revised returns were filed belatedly beyond six months, thereby violating Rule 7(9) of the TNVAT Rules, 2007. 2.6. Aggrieved by the assessment order dated 4.9....

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....(4) of the Act. However, when the final assessment order was passed on 4.9.2020, the Assessing Authority explicitly concluded as follows: "Total turnover redetermined: Rs. 37,28,468/-" "Taxable turnover determined: Rs. 37,28,468/-" Once the assessing authority formally concluded that the dealer's total taxable turnover was Rs. 37,28,468/-, the dealer fulfilled the statutory condition set out under Section 3(4) of the Act. 7. The Assessing Officer could not maintain two contradictory positions in the same order, i.e., on one hand, accepting that the dealer's total turnover was Rs. 37,28,468/- (below Rs. 50 Lakhs), and on the other hand, applying a tax rate of 14.5% meant for non-composition dealers on the grou....