2016 (6) TMI 1273 - HC - VAT and Sales Tax

Concessional rate of tax - sales to educational institutions - Section 88 (4) of the TNVAT Act - whether the petitioner is entitled to the concessional rate of tax under section 8 (5) of the Central Sales Tax Act? - Held that - the issue is squarely covered by the decision in the case of Technomed Electronics and another Vs. CTO, Thiruvanmiyur Assessment Circle, and another 2009 (1) TMI 821 - MADRAS HIGH COURT , where it was held that the order, dated March 31, 2008 passed by the Commercial Tax Officer, Thiruvanmiyur Assessment Circle, disallowing the concessional rate of tax at five per cent on the sales to educational institutions (impugned in W.P. No. 16154 of 2008) is set aside - matter is remitted back to the respondent to take note of the decision rendered in the above referred case, and extend the concessional rate of tax to the petitioner, by redoing the assessment for the relevant year.

Summary

Issues:
Challenge to assessment order under TNVAT Act based on entitlement to concessional rate of tax under Central Sales Tax Act.

Analysis:
The petitioner, a registered dealer under TNVAT Act and Central Sales Tax Act, challenged an assessment order under Section 88(4) of the TNVAT Act. The issue revolved around whether the petitioner was entitled to the concessional rate of tax under section 8(5) of the Central Sales Tax Act. The court noted that this issue had been addressed in a previous case where it was established that the petitioners, being registered dealers of specific goods to educational institutions and hospitals, were entitled to the concessional rate of tax under a specific notification without the need for 'C'/'D' Declaration Forms. The court highlighted that no such condition was imposed in the relevant notification and that the department had erroneously disallowed the concessional rate of tax to educational institutions due to a misapplication of the amendment brought about by Section 8(5) of the Central Sales Tax Act. The court emphasized that even after the amendment, certain notifications were still valid, entitling the petitioners to the concessional rate of tax.

The court, considering the specific arguments presented and the merits of the case, set aside a circular memorandum and the assessment order disallowing the concessional rate of tax to educational institutions. Consequently, the court allowed the writ petitions, directing the respondent to redo the assessment for the relevant year in line with the decision rendered in the previous case. The court found that the impugned order was incorrect and required interference, leading to the setting aside of the order and remittance of the matter back to the respondent for proper assessment. No costs were awarded in this judgment.