2015 (3) TMI 871 - HC - VAT and Sales Tax

Jurisdiction of High Court - Held that - Admittedly, in this case, the sales had been done to the tune of ₹ 47,00,000/ . In view of section 3(4)(a)(ii) extracted supra, the respondent has no jurisdiction to assess the tax based on the purchase value. According to the petitioner, the respondent had taken the purchase value as yardstick without considering the provisions of the Act. The statute speaks about the Sales Tax turnover alone for the purpose of liability under section 3(4) of the Tamil Nadu Value Added Tax Act, 2006. - The respondent has filed counter contending that the petitioner has got alternative remedy of filing appeal under section 51 of the Act and this court need not exercise its extra-ordinary jurisdiction to interfere with the order passed. - Hence, the impugned order is set aside - Decided in favour of assessee.

Issues:
Interpretation of section 3(4) of the Tamil Nadu Value Added Tax Act, 2006 regarding tax liability based on sales turnover.
Jurisdiction of assessing authority in determining tax liability.
Availability of alternative remedy under section 51 of the Act for filing an appeal.

Analysis:

1. Interpretation of Section 3(4) of the Tamil Nadu Value Added Tax Act, 2006:
The petitioner sought relief based on the interpretation of section 3(4) of the Act, which allows dealers with turnover below rupees fifty lakhs to pay tax at a specified rate. The petitioner argued that the respondent incorrectly assessed tax based on purchase value instead of sales turnover, as mandated by the statute. The court acknowledged the clear language of the provision, emphasizing that the liability under section 3(4) is determined solely based on the Sales Tax turnover, not the purchase value. As the sales in this case amounted to &8377; 47,00,000, falling below the threshold of &8377; 50,00,000, the court upheld the petitioner's contention and set aside the impugned order.

2. Jurisdiction of Assessing Authority:
The respondent contended that the petitioner should have pursued the alternative remedy of filing an appeal under section 51 of the Act, rather than seeking intervention from the court. However, the court exercised its jurisdiction, noting the clarity of section 3(4) and the respondent's error in assessing tax based on purchase value. The court emphasized that the statute explicitly outlines the criteria for tax liability, and in this case, the respondent's approach was not in accordance with the law. Consequently, the court set aside the impugned order and allowed the writ petition, without imposing any costs.

3. Availability of Alternative Remedy under Section 51:
While the respondent argued for the availability of an alternative remedy through the appeal process under section 51 of the Act, the court found it unnecessary to require the petitioner to pursue such remedy in light of the clear provisions of section 3(4) and the respondent's misinterpretation of the same. The court's decision to intervene and grant relief to the petitioner was based on the straightforward application of the statutory provisions governing tax liability under the Tamil Nadu Value Added Tax Act, 2006. The court's ruling underscores the importance of adhering to the statutory framework in tax assessments and upholding the rights of dealers in accordance with the law.

In conclusion, the judgment by the Madras High Court in this case clarifies the application of section 3(4) of the Tamil Nadu Value Added Tax Act, 2006, emphasizing the significance of sales turnover in determining tax liability and highlighting the need for assessing authorities to adhere to the statutory provisions accurately.

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