2002 (10) TMI 745 - HC - VAT and Sales Tax

Summary

Issues:
1. Interpretation of section 3(1)(b) of the Tamil Nadu General Sales Tax Act.
2. Applicability of tax exemption on turnover under section 7-E for dealers opting for compounding method.
3. Validity of Commissioner's clarification regarding tax payment under section 7-E.

Analysis:
1. The petitioner, a dealer paying tax under section 7-E of the Act, sought clarification on excluding the first three lakhs of turnover for tax payment under section 7-E. The Commissioner clarified that dealers under section 7-E are not entitled to the exemption provided in section 3(1)(b). The Special Tribunal upheld this view, considering the provisions of section 3 and section 7-E.

2. The petitioner argued that the introduction of section 3(1)(b) should allow for the exclusion of turnover even under section 7-E, which was introduced earlier. However, the court rejected this argument, emphasizing that section 7-E provides for a fixed rate of tax and simplified assessment, distinct from the regular charging sections. The court upheld the Commissioner's clarification as correct and in line with the statutory provisions.

3. The court concluded that the petitioner's contention cannot be accepted as compounding under section 7-E is an optional, hassle-free method different from regular charging sections. Therefore, the petitioner's claim for exemption under section 3(1)(b) while paying tax under section 7-E was dismissed. The writ petition and connected miscellaneous petition were both dismissed, with no order as to costs.