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2022 (8) TMI 1197 - HC - VAT and Sales TaxClassification of goods - Chewing Tobacco - to be classified under Entry 69 of part C of the First Schedule to the Tamil Nadu Value Added Tax, 2006 or exempt from tax? - applicability of N/N. II(1)/CTR/52(a)/2007-G.O.No.146, dated 08.08.2007 - HELD THAT - It is seen that as per Notification No.II(1)/CTR/52(a)/2007-G.O.No.146, dated 08.08.2007, chewing tobacco was exempted from tax. By Notification No.II(1)/CTR/12(R-1)/2011-GO.No.75, dated 11.07.2011, chewing tobacco was brought under taxation. Following the same, notification has been issued to the petitioner informing that snuff and cheroot and chewing tobacco included in G.O.Ms.No.149, dated 12.10.2009 thereby, levying 12.5% tax. It is seen that from 01.04.2007 to 12.10.2009, chewing tobacco was exempted. The tobacco manufacturers association had filed W.P.No.21237 of 2011 and this Court by order, dated 15.09.2011, granted stay and thereby restrained the Commercial tax officials to levy Value Added Tax on chewing tobacco for sale effected from 01.04.2007 to 12.010.2009. This Court finds that deduction of Rs.2,05,000/- from the petitioner s State Bank account on 25.05.2022 is not proper. Hence, the said amount to be re-credited to the petitioner s account. Further, the petitioner s rectification petition to be considered by the assessing officer. The Commissioner of Commercial Taxes, Trichy is directed to consider and dispose of the R.P.Nos.5 and 40 of 2010 within a period of three months from the date of receipt of copy of this order and the Assessing Officer to conclude the rectification proceedings by then - Petition disposed off.
Issues:
1. Classification of chewing tobacco under the Tamil Nadu Value Added Tax Act. 2. Exemption of chewing tobacco from tax between 2007 and 2009. 3. Rectification petition under Section 84 of the Tamil Nadu Value Added Tax Act. 4. Attachment of petitioner's bank account without prior notice. 5. Pending revision petitions before the Joint Commissioner of Commercial Taxes. Classification of Chewing Tobacco: The petitioner, engaged in the manufacture of tobacco products, contested the classification of chewing tobacco under Entry 69 of Part C of the First Schedule to the Tamil Nadu Value Added Tax Act, 2006. The petitioner argued that chewing tobacco had been wrongly classified, leading to the imposition of a 12.5% tax on the entire sale value. The respondents maintained that the classification was correct, resulting in the tax liability. Exemption of Chewing Tobacco: Notifications issued between 2007 and 2011 exempted chewing tobacco from tax under the Tamil Nadu Value Added Tax Act. The court noted that chewing tobacco was exempted from tax during this period and referred to past judgments where similar exemptions were upheld. The court emphasized the need for the assessing officer to await the outcome of pending revision petitions before taking further action. Rectification Petition: The petitioner filed a rectification petition under Section 84 of the Tamil Nadu Value Added Tax Act, which the Assessing Officer failed to consider before issuing a demand notice for tax payment. The court directed the assessing officer to consider and dispose of the rectification petition promptly, ensuring no coercive action against the petitioner during this process. Attachment of Bank Account: The petitioner's bank account was attached without prior notice, leading to the recovery of a significant amount. The court found this action improper and ordered the re-crediting of the amount to the petitioner's account. It emphasized the importance of following due process before resorting to coercive measures. Pending Revision Petitions: The petitioner had pending revision petitions before the Joint Commissioner of Commercial Taxes, Trichy, which were yet to be resolved. The court directed the Commissioner to conclude these proceedings within three months, highlighting the need for a fair and timely resolution. The court stressed the importance of considering the petitioner's representation and rectification petition on their merits. In conclusion, the court disposed of the writ petition, directing the authorities to re-credit the amount deducted from the petitioner's account, consider the rectification petition, and resolve the pending revision petitions promptly. The petitioner was instructed to submit necessary documents for further review, ensuring a fair and transparent process.
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