2016 (6) TMI 1063 - SC - VAT and Sales Tax

Maintainability of writ petition before the high court - HC dismissed the petition for want of alternate appellate remedy - three question of laws involved - transfer of business - eligibility of exemption - Section 2(41) of the Tamil Nadu Value Added Tax Act, 2006? - Held that - In our considered opinion the questions that have been raised by the appellant being absolutely pure questions of law, the High Court should have decided these matters. We may hasten to clarify that as far as these issues are concerned and the facts brought on record which include documents are not disputed. When we say that facts are not disputed it is meant that some transactions have taken place inside the State while the towers are located outside and the documents which are brought on record their existence is not disputed. - High to entertain the writ petition and decide the matter.

Summary

Issues:
1. Whether the transfer of one of the businesses qualifies for exemption under Explanation III to Section 2(41) of the Tamil Nadu Value Added Tax Act, 2006?
2. Whether the State of Tamil Nadu has jurisdiction to levy VAT Tax on telecommunication towers located outside the State?
3. Whether the Assessing Authority has jurisdiction to pass an assessment order regarding a composite transaction involving telecommunication towers within and outside Tamil Nadu?

Analysis:
1. The Supreme Court heard appeals against the High Court's decision that declined interference due to the availability of an alternative remedy under the Tamil Nadu Value Added Tax Act, 2006. The appellant argued that the High Court failed to consider the pure questions of law involved. The issues raised included whether the transfer of a business qualified for exemption under the Act. The Court noted these questions as pure legal issues and directed the High Court to consider them, emphasizing that the facts were not in dispute.

2. Another issue raised was whether the State of Tamil Nadu could levy VAT on telecommunication towers situated outside the state. The appellant contended that this was a pure question of law that warranted consideration. The Court acknowledged the legal nature of the issue and instructed the High Court to address it, highlighting that the facts regarding the location of the towers were undisputed.

3. The third issue revolved around the Assessing Authority's jurisdiction to assess a composite transaction involving telecommunication towers both within and outside Tamil Nadu. The appellant argued that the TNVAT Act, 2006, lacked provisions for such bifurcation in assessment. The Court agreed that this was a legal question that needed resolution and directed the High Court to examine it. The Court stressed that the documents and facts related to the transactions were not in dispute, clarifying that certain transactions occurred within the state while the towers were located outside.

In conclusion, the Supreme Court allowed the appeals, set aside the High Court's order, and remitted the matters back to the High Court for consideration. The High Court was instructed to dispose of the appeals within six months, maintaining the interim orders. The Court made no ruling on costs. Additionally, it disposed of related writ petitions in line with the decisions made in the civil appeals.