2015 (6) TMI 434 - HC - VAT and Sales Tax

Jurisdiction of Commercial Tax Officer - Held that - sales had been done to the tune of ₹ 35,06,220/-. In view of Section 3(4) (a)(ii), 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 Sales Tax turnover alone for the purpose of liablity under Section 3(4) of the Act - Hence impugned order is set aside - Decided in favour of assessee.

Summary

Issues: Jurisdiction of assessing tax based on purchase value under Section 3(4) of the Tamil Nadu Value Added Tax Act, 2006

Analysis:
1. Issue of Interpretation of Section 3(4) of the Act: The petitioner argued that the respondent assessed tax based on purchase value, contrary to the provisions of Section 3(4) of the Act. The petitioner contended that the statute mandates considering only sales turnover for liability under Section 3(4) of the Act. The court noted that the sales were only &8377; 35,06,220, below the threshold of &8377; 50,00,000, as required by Section 3(4)(a)(ii). The court found merit in the petitioner's argument, emphasizing the clarity of Section 3(4) and set aside the impugned order in favor of the petitioner.

2. Alternative Remedy of Filing Appeal: The respondent contended that the petitioner had the alternative remedy of filing an appeal under Section 51 of the Act, suggesting that the court should not interfere in the order passed by the respondent. However, the court, after considering the provisions of Section 3(4) and the sales turnover being below the prescribed limit, decided to exercise its jurisdiction and set aside the impugned order. The court allowed the writ petition, highlighting the clarity of the statutory provision and the lack of jurisdiction by the respondent to assess tax based on purchase value.

3. Conclusion: The High Court, after a detailed analysis of the arguments presented by both parties and a thorough examination of the relevant provisions of the Tamil Nadu Value Added Tax Act, 2006, concluded that the respondent had erred in assessing tax based on purchase value instead of sales turnover as required by Section 3(4) of the Act. The court upheld the petitioner's contention, set aside the impugned order, and allowed the writ petition, emphasizing the importance of adhering to statutory provisions in tax assessments. The judgment highlighted the significance of interpreting tax laws accurately and ensuring compliance with statutory requirements to avoid erroneous tax assessments.