2018 (1) TMI 93 - HC - VAT and Sales Tax

Rate of tax - sale of scientific equipments to educational institutions - Held that - This very issue was considered by this Court in the case of Tvl. Consolidated Engineering Services v. The Commercial Tax Officer 2016 (6) TMI 1273 - MADRAS HIGH COURT and the Court after taking into consideration the earlier decision, has allowed the writ petition and remitted the matter back to the authority for re-doing the assessment. Matter is remanded back to the respondent to take note of the decision in the above referred case and extend the concessional rate of tax to the petitioner, by re-doing the assessment for the relevant year.

Summary

Issues:
Rate of tax payable for sale of scientific equipments to educational institutions under the Central Sales Tax Act, 1956 for the assessment year 2004-05.

Analysis:
The petitioner challenged the assessment order dated 12.01.2011 under the Central Sales Tax Act, 1956 for the assessment year 2004-05, specifically focusing on the rate of tax payable for the sale of scientific equipments to educational institutions. The Court referred to a previous case, Tvl. Consolidated Engineering Services v. The Commercial Tax Officer, where a similar issue was considered. In that case, the Court allowed the writ petition and remitted the matter back to the authority for reassessment. The Court highlighted that the petitioners, being registered dealers of scientific goods to educational institutions and hospitals, were entitled to the concessional rate of tax under Notification No.II(1) CT & RE/38/76 dated 20.12.1975. The Court emphasized that the amendment brought about by Section 8(5) of the Central Sales Tax Act, by Act 20/2002, did not apply to sales of scientific equipments and instruments to educational institutions or hospitals. Consequently, the circular memorandum dated 10.06.2002 was set aside, and the impugned order disallowing the concessional rate of tax was also set aside.

The Court found that the impugned order required interference as the reasoning provided by the respondent was incorrect. Therefore, the writ petition was allowed, the impugned order was set aside, and the matter was remitted back to the respondent to reconsider the decision in the previous case and extend the concessional rate of tax to the petitioner by redoing the assessment for the relevant year. The Court reiterated that no costs were to be imposed in this matter, and the connected Miscellaneous Petition was closed. Following the precedent set by the previous case, the writ petition was allowed, the impugned order was set aside, and the matter was remanded back to the respondent for reassessment in accordance with the decision in the previous case.