2007 (8) TMI 699 - HC - VAT and Sales Tax

Summary

Issues: Challenge to assessment orders under Central Sales Tax Act, 1956 for assessment years 2002-03 and 2003-04 regarding levy of tax on poultry-feed supplements.

Analysis:
The judgment pertains to writ petitions challenging assessment orders under the Central Sales Tax Act, 1956 for the assessment years 2002-03 and 2003-04, concerning the levy of tax on poultry-feed supplements. The petitioners, who are dealers in poultry-feed supplements, were inspected by enforcement officials, leading to revised and original assessment orders for the respective years. The dispute primarily revolved around the rate of tax applicable to inter-State sales of poultry-feed supplements covered by C declaration forms under the CST Act. The petitioners contested the assessment orders on various grounds, focusing specifically on the turnover of poultry-feed supplements covered by C forms.

The petitioners argued that based on relevant Government Orders and notifications, the rate of tax on the sale of poultry feeds within Tamil Nadu was two per cent, making inter-State sales of poultry-feed supplements against C forms eligible for the same rate. They contended that the assessment levying four per cent tax was erroneous and should be set aside. The interpretation of Section 8 of the CST Act was crucial in determining the appropriate tax rate for such transactions. The court considered the notification issued under the Tamil Nadu General Sales Tax Act, 1959, and Section 8 of the CST Act, concluding that the levy of tax on poultry-feed supplements covered by C forms should be restricted to two per cent for the relevant assessment years.

Therefore, the court allowed the writ petitions to the extent of reducing the tax rate on poultry-feed supplements covered by C forms to two per cent for the respective assessment years. However, no opinion was expressed on other aspects of the assessments, as the petitioners reserved the right to seek remedies through appropriate forums. The judgment highlighted the importance of adhering to the prescribed tax rates and laws governing inter-State trade to ensure accurate assessments. The court's decision provided clarity on the tax treatment of poultry-feed supplements in inter-State sales, emphasizing compliance with statutory provisions and notifications.