2013 (10) TMI 1280 - HC - VAT and Sales Tax

Whether in the facts and circumstances of the case the Tribunal is right in holding that the additional sales tax would be attracted for the assessment year 1996-97 since the taxable turnover did not exceed 100 Crores as per amended provision of section 2(1)(aa) as per amended Act 31 of 1996 with effect from August 1 1996. - Held that - The issue as regards the levy of additional sales tax in respect of the assessment year 1996-97 is covered by the decision of this court in the case of State of Tamil Nadu v. National Time Co. reported in 2010 (7) TMI 842 - MADRAS HIGH COURT that after taking the taxable turnover for the entire year the taxable turnover up to the date of amendment has to be assessed with reference to the relevant tax rate therein applicable to the period. - matter is remanded back to the assessing officer to work out the liability based on the decision of this court. Thus taking the taxable turnover for the entire year the taxable turnover up to the period July 31 1996 has to be worked out to attract the liability at the rates specified therein and beyond that the liability of the turnover has to be worked out based on the amended provision depending on the taxable turnover crossing rupees 100 crores for the whole year. - Decided in favour of Revenue.

Summary

Issues:
Levy of additional sales tax for the assessment year 1996-97 based on the amended provision of section 2(1)(aa) as per Act 31 of 1996.

Analysis:
The High Court admitted the tax case revision by the Revenue on the substantial question of law regarding the levy of additional sales tax for the assessment year 1996-97. The court referred to a previous decision in the case of State of Tamil Nadu v. National Time Co., establishing that the taxable turnover up to the date of the amendment must be assessed with reference to the relevant tax rate applicable to that period. The court set aside the Sales Tax Appellate Tribunal's order and remanded the matter back to the assessing officer to calculate the liability based on the court's decision. It was clarified that the taxable turnover up to July 31, 1996, should attract liability at the rates applicable until that date, while turnover beyond that should be assessed based on the amended provision for taxable turnover exceeding 100 crores for the entire year. Consequently, the tax case revision was disposed of with no costs incurred.