2021 (2) TMI 246 - HC - VAT / Sales Tax

Addition for non-maintenance of stock book - levy of additional sales tax - estimation of 1% addition for non-maintenance of stock book on the reasoning that the assessee is not a manufacturer - levy of additional sales tax for the assessment year 1996-97 since the taxable turnover did not exceed 100 crores as per amended provision of Section 2(1)(aa) - validity of deletion of consequential surcharge, additional sales tax and penalty - HELD THAT - The substantial questions of law which have been raised for consideration has been answered in Philips India Limited vs The Assistant Commissioner (CT), Fast Tract Assessment Circle II and others 2004 (5) TMI 538 - MADRAS HIGH COURT where it was held that the provision under Section 55 of the TNGST Act and the relevant rules would be applicable for the purpose of effecting rectification. The Tamil Nadu Additional Sales Tax Act, 1970 is not a self contained code. It merely supplements Tamil Nadu General Sales Tax Act. It is necessary to read and construe the Tamil Nadu General Sales Tax Act and the Tamil Nadu Additional Sales Tax Act together. The tax case revision stands disposed of.

Issues:
1. Jurisdiction transfer from Taxation Special Tribunal to High Court
2. Substantial questions of law regarding liability for additional sales tax
3. Interpretation of provisions under Tamil Nadu Additional Sales Tax Act, 1970

Jurisdiction Transfer:
The case involved a Tax Case Revision under the Tamil Nadu General Sales Tax Act, initially filed before the Taxation Special Tribunal at Chennai. Subsequently, the jurisdiction was shifted to the High Court for hearing and disposal as a tax case revision.

Substantial Questions of Law - Liability for Additional Sales Tax:
The Department filed the tax case revision based on substantial questions of law. These questions included issues such as the estimation of 1% addition for non-maintenance of stock book, applicability of additional sales tax for the assessment year 1996-97, and the deletion of consequential surcharge, additional sales tax, and penalty. The judgment referred to a previous case, Philips India Limited vs The Assistant Commissioner, which clarified the liability for additional sales tax. It highlighted the amendments made to Section 2(1)(a) and the introduction of Section 2(1)(aa) under the Tamil Nadu Additional Sales Tax Act, 1970. The court emphasized that the liability under the original provision existed from April 1, 1996, to July 31, 1996, and post-amendment, the exemption limit was raised to ?100 crores. The court rejected the argument that there was no liability during the mentioned period and upheld the Assessing Officer's decision regarding the taxable turnover for the assessment year 1996-97.

Interpretation of Provisions under Tamil Nadu Additional Sales Tax Act, 1970:
The judgment further discussed the applicability of Section 55 of the TNGST Act for rectification under the Tamil Nadu Additional Sales Tax Act, 1970. It clarified that the additional sales tax collection was akin to sales tax at a higher rate for dealers exceeding a turnover limit. The court highlighted the interplay between the Tamil Nadu General Sales Tax Act and the Tamil Nadu Additional Sales Tax Act, emphasizing that they should be read together. The ruling referenced relevant rules and previous court decisions to support the interpretation that provisions under the TNGST Act could be utilized for rectification under the Additional Sales Tax Act. The judgment concluded by aligning with the decision in Philips India Limited and disposed of the tax case revision accordingly, without imposing costs.

This detailed analysis of the judgment outlines the issues of jurisdiction transfer, substantial questions of law regarding liability for additional sales tax, and the interpretation of provisions under the Tamil Nadu Additional Sales Tax Act, 1970, providing a comprehensive understanding of the legal complexities addressed in the case.

← Previous Next →