9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2012 (11) TMI 1054 - HC - VAT and Sales TaxInter state v/s Intra state sale - challenge to levy of Tamil Nadu value added tax - Held that -Merely because there is movement of goods from the State of Tamil Nadu to another State at the instance of the buyer that would not take it out of the purview of the term sale within the State. There are certain rules which provide for transportation of goods in question after the sale. But that does not change the character of the sale within the State consequent to tender-cum-auction sale. The benefit which the petitioners may get out of the provisions of the Income-tax Act is totally alien to the payment of tax under the TNVAT Act 2006 as the two enactments operated in different fields. There is no scope or provision for reading one Act into the other unless there is an express provision. Since the sale in this case was effected within the State of Tamil Nadu on the basis of the tender-cum-auction sale and the petitioners in all these cases have agreed to abide by the terms and conditions unconditionally there cannot be any manner of doubt that the case squarely falls within the mischief of section 3 of the TNVAT Act 2006. Therefore the demand for payment of value added tax under the TNVAT Act 2006 is justified. There is no basis to justify the claim as inter-State sale. The said plea is specious and not as per law. The petitioners have not made out a case for the relief sought for both in law and on facts. W.P. dismissed.
Issues Involved:
1. Determination of the nature of the sale as inter-State or intra-State. 2. Applicability of Tamil Nadu Value Added Tax (TNVAT) on the sale. 3. Compliance with the terms and conditions of the tender-cum-auction sale notification. Detailed Analysis: 1. Determination of the Nature of the Sale as Inter-State or Intra-State: The primary issue revolves around whether the sale of sandalwood was an inter-State sale or an intra-State sale. The petitioners argued that the sale was an inter-State trade under section 3(a) of the Central Sales Tax Act, 1956, and thus should be taxed at a rate of 2% instead of 12.5%. However, the court noted that the auction, confirmation, and delivery of the sandalwood all occurred within Tamil Nadu. The sale was conducted by the District Forest Officer, Salem, and the payment was made in Tamil Nadu. The court emphasized that the entire transaction took place within Tamil Nadu, making it an intra-State sale. The movement of goods to another state by the buyer does not alter the nature of the sale. 2. Applicability of Tamil Nadu Value Added Tax (TNVAT) on the Sale: The court examined the provisions of the TNVAT Act, 2006, particularly section 3, which mandates that every dealer with a turnover exceeding a specified amount must pay tax under the Act. The definition of "dealer" and "casual trader" under sections 2(15) and 2(12) respectively, includes those engaging in business transactions within the state. The court found that the sale of sandalwood to the petitioners, who were either dealers or casual traders, was subject to TNVAT. The court also referenced clause 28(a) of the tender-cum-auction sale notification, which explicitly required the payment of VAT at 12.5%. 3. Compliance with the Terms and Conditions of the Tender-Cum-Auction Sale Notification: The petitioners had agreed to the terms and conditions of the tender-cum-auction sale notification, which included the payment of VAT at 12.5%. Clause 27 of the notification indicated deemed acceptance of these terms upon submission of the tender. The court highlighted that the petitioners could not later contest the agreed terms, including the tax rate. The court also referenced a similar case, Karnataka Soaps and Detergents Ltd. v. District Forest Officer, Sathyamangalam [2005] 140 STC 112 (Mad), where it was held that the movement of goods post-sale does not affect the nature of the sale as intra-State. Conclusion: The court concluded that the sale of sandalwood was an intra-State sale subject to TNVAT at 12.5%. The petitioners' argument for a lower tax rate under inter-State trade provisions was rejected. The court dismissed the writ petitions, upholding the demand for VAT as per the tender-cum-auction sale notification and the TNVAT Act, 2006. The court emphasized that the petitioners were bound by the terms they had agreed to and could not claim otherwise. The petitions were dismissed with no costs, and the related miscellaneous petitions were closed.
|
