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2019 (1) TMI 1 - HC - VAT and Sales TaxLevy of resale tax - printer cartridge - benefit of exemption notification II(2)/CT/568/F6/2002 dated 01.07.2002 - Section 3-H of the TNGST Act 1959 - Held that - Printer cartridges which are admittedly categorised as consumable in S.No.18(1) of the first schedule to the T.N.G.S.T. Act cannot be treated as peripherals for the purpose of the exemption notification. Division Bench of this Court in Kores India Ltd. Vs. State of Tamil Nadu 2018 (1) TMI 1252 - MADRAS HIGH COURT which has been recently passed dealing with an identical issue under the TNGST Act 1959 has held that ink jet cartridges and toner cartridges are parts and accessories of printer which is a peripheral to a computer system and would be covered under Entry Nos.22 & 24 of serial No.68 Part B of First Schedule to the Tamil Nadu Value Added Tax Act 2006. Petition allowed.
Issues:
1. Denial of exemption from resale tax on printer cartridge under Section 3-H of the TNGST Act, 1959. 2. Interpretation of relevant entries in the T.N.G.S.T. Act, 1959 regarding exemption notification. 3. Application of previous judicial decisions in similar cases. 4. Categorization of printer cartridges as consumables or peripherals for exemption purposes. Analysis: 1. The petitioner challenged the denial of exemption from resale tax on printer cartridges by the 3rd respondent. The impugned order dated 28.03.2008 was issued following a notice dated 04.10.2007 to revise the assessment. The petitioner argued for the benefit of exemption notification II(2)/CT/568/F6/2002 dated 01.07.2002 under the TNGST Act, 1959. 2. The Division Bench's decision in Canon India Private Limited case under the Tamil Nadu VAT Act, 2006 was cited by the petitioner's counsel. This decision was followed by another Division Bench in Kores India Ltd. Vs. State of Tamil Nadu, which dealt with a similar issue under the TNGST Act, 1959. The petitioner sought relief based on these precedents. 3. The respondent's counsel argued against applying the Canon India Private Limited case, stating it was based on the Tamil Nadu Value Added Tax 2006 provisions. Reference was made to the decision of the Supreme Court in Commissioner of Central Excise, Mumbai Vs. CMS Computers Private Limited regarding valuation under the Central Excise Act, which was deemed irrelevant for determining goods classification under the T.N.G.S.T. Act, 1959. 4. The court analyzed the relevant entries in the T.N.G.S.T. Act, 1959, particularly Entry 18 which categorizes computers, peripherals, and consumables. The exemption notification effective from 01.07.2002 specified exemption for computers and their hardware and peripherals as per Sub item (i) of item 18 Part-B of the First Schedule. The court acknowledged the categorization of printer cartridges as consumables but relied on the Kores India Ltd. case to allow the writ petition. In conclusion, the court allowed the writ petition based on the Division Bench's decision in Kores India Ltd. Vs. State of Tamil Nadu, as it dealt with a similar issue under the TNGST Act, 1959. The court upheld the petitioner's claim for exemption from resale tax on printer cartridges, following the established legal precedent.
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