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2018 (12) TMI 1826 - HC - VAT and Sales Tax100% EOU - Jurisdiction - power of to disallow the refund claimed by the respondent - Section 18(2) and 18(3) of the TNVAT Act 2006 - HELD THAT - This Court after considering the fact that the respondent has sold the goods to a company which is located in the Special Economic Zone and it is not disputed that 100% of the goods were also exported without any exemption held that Section 18(1) of the Tamil Nadu Value Added Tax Act, 2006 gets attracted as the sale falls under Section 5(3) of the Central Sales Tax Act 1956. The Writ Petitions were thus allowed and the impugned order of the appellant was quashed holding that reversal of income tax concession has been done on a misconception and misreading of the provisions of Section 18 of the Tamil Nadu Value Added Tax Act, 1956.
Issues:
1. Jurisdiction of the appellant to disallow the refund claimed by the respondent under Section 18(2) and 18(3) of the Tamil Nadu Value Added Tax Act, 2006. 2. Interpretation of Section 18(1) of the Tamil Nadu Value Added Tax Act, 2006 in relation to sales to a company in a Special Economic Zone. 3. Applicability of Section 5(1) and (3) of the Central Sales Tax Act to the case. 4. Exemption for 100% Export Oriented Units and Units in the Chennai Export Processing Zone. Analysis: 1. The respondent, a registered dealer in granites, claimed income tax concession and refund of tax paid under Section 18 of the Tamil Nadu Value Added Tax Act, 2006. The appellant later demanded a significant sum for two assessment years, reversing input tax credits and income tax concessions. The challenge was based on the appellant's jurisdiction to disallow the refund claimed. The High Court held that the appellant lacked jurisdiction to do so under Section 18(2) and 18(3) of the Act, leading to the quashing of the impugned orders. 2. The Court considered that the respondent sold goods to a company in a Special Economic Zone, with 100% of the goods exported. It was determined that Section 18(1) of the Act applied as the sale fell under Section 5(3) of the Central Sales Tax Act, 1956. The appellant's reversal of income tax concession was deemed a misconception of Section 18, leading to the quashing of the impugned order. 3. Section 5(1) and (3) of the Central Sales Tax Act were invoked to determine when a sale is deemed to take place in the course of export. The last sale preceding the export is considered part of the export if it complies with the export agreement or order. This provision was crucial in establishing the applicability of Section 18(1) of the Tamil Nadu Value Added Tax Act to the case. 4. The appellant argued that the sales in question did not fall under Section 18(1)(ii) of the Act. However, a Government Order exempted 100% Export Oriented Units from sales tax, supporting the respondent's position. The High Court found the Single Judge's order well-founded and dismissed the Writ Appeals, emphasizing the exemption for such units. In conclusion, the High Court's judgment clarified the jurisdictional limits of the appellant, interpreted the relevant tax provisions, and upheld the exemption for certain export-oriented units, leading to the dismissal of the appeals.
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