2016 (11) TMI 127 - HC - VAT and Sales Tax

Validity of order of assessment - identical issue pending before the Hon ble Supreme Court - should the proceedings before the respondent await the decision of the Apex Court? - Held that - it is not in dispute that validity to Section 19(11) of the Tamil Nadu VAT Act is put to challenge before the Hon le the Supreme Court by the petitioner themselves. Therefore, the question is as to whether the petitioner would be eligible to claim tax credits in terms of Section 19(11) of the Act. Therefore, the decision to be taken by the Hon ble Supreme Court would have a direct bearing on the issue involved. Therefore, necessarily, the proceedings before the respondent should await the decision of the Hon ble Supreme Court. However, for that reason, this Court is not inclined to quash the impugned proceedings suffice it to keep it in abeyance, pending decision by the Hon ble Supreme Court - petition disposed off - assessment order kept in abeyance till the decision of Supreme court.

Summary

Issues:
Challenge to assessment order for the year 2009-10 under Tamil Nadu Value Added Tax Act, 2006. Interpretation of Section 23(1) of the Act regarding identical legal questions pending before the High Court or Supreme Court.

Analysis:

1. The petitioner, a registered dealer under the Tamil Nadu Value Added Tax Act, challenged the assessment order for the year 2009-10. The petitioner also raised a challenge against Section 19(11) of the Act in the Supreme Court through a Special Leave Petition (SLP) and claimed that similar issues were pending before the Hon'ble Supreme Court in other connected matters.

2. Section 23(1) of the Tamil Nadu VAT Act allows an assessee to claim that a legal question in their assessment case is identical to a question pending before the High Court or Supreme Court. If the assessing authority agrees, the question need not be raised again. In this case, the petitioner had not made an application under Section 23, even though they raised the issue of similarity with the Supreme Court matter.

3. The High Court noted that the validity of Section 19(11) of the Tamil Nadu VAT Act was being challenged by the petitioner in the Supreme Court itself. The decision of the Supreme Court on this issue would directly impact the petitioner's eligibility to claim tax credits under Section 19(11). Therefore, the proceedings before the respondent should await the Supreme Court's decision, though the High Court did not quash the proceedings but ordered to keep them in abeyance.

4. Consequently, the High Court disposed of the Writ Petition by directing the respondents to keep the assessment order in abeyance and refrain from initiating any recovery actions until the Supreme Court decides on the Special Leave Petition. No costs were awarded, and a related application was closed as well.