2006 (11) TMI 547 - HC - VAT and Sales Tax

Summary

Issues involved:
Interpretation of Section 3(3) of the Tamil Nadu General Sales Tax Act, 1959 regarding liability to pay differential rate of tax between seller and purchaser based on Form XVII declaration.

Detailed Analysis:

1. Background and Facts:
The petitioner, a registered dealer, sold aluminium extrusion at a concessional rate of 3% against Form XVII declaration. The respondent later proposed to revise the assessment, directing the petitioner to pay the differential rate of tax. The petitioner objected, citing Section 3(3) of the Act.

2. Legal Provisions Involved:
Section 3(3) of the Act provides for a concessional rate of tax for sales of goods for specific purposes. The petitioner argued that the respondent's order to pay the differential rate of tax was not in accordance with the provisions of the Act.

3. Previous Court Orders and Precedents:
The petitioner referred to a previous judgment where it was held that tax and penalty for contravention of Form XVII conditions could be imposed only against the purchasing dealer, not the seller, as per Section 3(3) of the Act. Another unreported judgment supported this view.

4. Court Decision and Rationale:
The Court analyzed the legal provisions, precedents, and the specific facts of the case. It concluded that the respondent's decision to make the petitioner pay the differential rate of tax was unsustainable. Citing binding precedents, the Court set aside the respondent's order and allowed the writ petition. No costs were awarded.

5. Final Judgment:
The Court held that based on the legal interpretation of Section 3(3) of the Act and in line with previous judgments, the respondent's decision was not sustainable. The impugned order was set aside, and the writ petition was allowed. The connected Writ Petition Miscellaneous Petition was dismissed with no order as to costs.