2017 (4) TMI 1554 - HC - VAT and Sales Tax

Levy of sales tax - vires of Section 1(2)(b) of the Tamil Nadu Value Added Tax (5th Amendment) Act 2013 - effect of the amendment bought by this section retrospective or prospective - HELD THAT - The demand is on account of the retrospective operation of the statutory provision pursuant to the 5th Amendment Act 2013. In the light of the new notification of the Government dated 21.04.2015 the demand made on the petitioner is unsustainable. Petition allowed.

Summary

Issues:
Challenge to demand for payment of sales tax based on retrospective amendment to the Tamil Nadu Value Added Tax Act.

Analysis:
The petitioner, a hotel, challenged a demand for sales tax payment due to a retrospective amendment to the Tamil Nadu Value Added Tax Act from 01.04.2013. The South India Hotels and Restaurants Association also filed a writ petition against Section 1(2)(b) of the 5th Amendment Act, 2013, which was deemed arbitrary and illegal. The Revenue's counsel mentioned that retrospective demands were waived by a government notification from 21.04.2015, leading to the disposal of the association's petition. The respondent, TASMAC, clarified that the petitioner only challenged the demand and did not seek a writ of declaration. The demand was attributed to the retrospective effect of the statutory provision post the 5th Amendment Act, 2013. However, with the new government notification dated 21.04.2015, the demand on the petitioner was deemed unsustainable. Consequently, the writ petition was allowed, with no costs incurred, and the connected miscellaneous petition was closed.