9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2020 (2) TMI 118 - HC - VAT and Sales TaxLevy of Purchase tax - Cotton Kappas - the contention of the Petitioner is that Purchase Tax under Section 12 (1) (a) will apply only on purchase from the registered dealer who fails to pay tax and not on purchase of goods from unregistered dealers - HELD THAT - The arguments of the learned counsel for the Petitioner that no purchase tax is payable under Section 12 (1) of the Act appears to be incorrect in as much as the tax is payable on such purchase. Section 12 (1) is an exception to Section 3 of the Act. Further, a special dispensation has been provided to avail credit of such Tax as Input Tax Credit and to utilise the same under Section 12 (2) of the Act. Thus, the Petitioner was liable to pay tax. The demand for levy of purchase tax in the impugned order is upheld - The Petitioner may however proceed to avail credit of such Tax under the Provisions of Section 12 (2) of the TNVAT, 2006 and utilize the same under the Provisions of the Tamil Nadu Goods Service Tax Act, 2017 if there are no other adjustment of Tax to be made under the TNVAT act, 2006 - petition disposed off.
Issues involved:
Challenge to order for Assessment Year 2007-2008, Interpretation of Section 12(1) of TNVAT Act, 2006, Principles of Natural Justice in passing order. Analysis: The petitioner challenged an order for the Assessment Year 2007-2008, which re-fixed the taxable turnover due to non-payment of purchase tax on Cotton Kappas. The petitioner agreed to pay the purchase tax under Section 12 of the TNVAT Act, 2006. A revision notice reduced the taxable turnover, but the petitioner still admitted liability for purchase tax on Cotton Kappas. The petitioner contended that purchase tax under Section 12(1)(a) applies only to purchases from registered dealers who fail to pay tax, not from unregistered dealers or agriculturalists. The petitioner argued that as a dealer, the purchase tax provision should not apply as they are not a manufacturer. The petitioner also alleged a lack of Principles of Natural Justice in passing the order. The government advocate for the respondent defended the order, stating that any purchase by a registered dealer, whether from a registered or unregistered dealer, of untaxed goods is taxable under Section 12(1). The tax paid as purchase tax can be used as Input Tax Credit under Section 12(2) of the TNVAT Act, 2006. The government advocate disputed the petitioner's claim of only dealing in Cotton Kappas, suggesting that processing was done before selling cotton lint. The court held that the petitioner's argument that no purchase tax is payable under Section 12(1) was incorrect, as the tax is due on such purchases, providing a credit under Section 12(2) for future VAT liabilities. The court upheld the demand for purchase tax in the order, allowing the petitioner to utilize the tax credit under the TNVAT Act, 2006, and the Tamil Nadu Goods & Service Tax Act, 2017. The writ petition was disposed of with no costs, and the connected miscellaneous petition was closed.
|
