2022 (10) TMI 54 - HC - VAT and Sales Tax

Levy of purchase tax - Section 12(1)(c) of the TNVAT Act, 2006 - right of the dealer to seek exemption if the dealer is able to establish that its turn over for the relevant years is less than Rs.300 Crores - principles of natural justice - HELD THAT - The learned Special Government Pleader also fairly submitted about the legal position, wherein under Section 15 of the TNVAT Act, there has been a total exemption provided for certain items, where Schedule IV states about various items wherein Entry 68 speaks about pulses and other items which have been dealt with by the petitioner/dealer herein. But the only catch is that the total turn over shall not be more than Rs.300 Crores. The ground on which the revisional authority remanded the matter to the assessing authority to reconsider the issue by giving an opportunity to the petitioner to produce the documents to substantiate their claim that their turn over is less than Rs.300 Crores is based on the legal position and not based on the judgment in M/s.Sunrise Foods Private Limited's case 2020 (5) TMI 494 - MADRAS HIGH COURT and therefore the findings or reasons given in the impugned notice itself by the assessing authority that in view of the Division Bench judgment against M/s.Sunrise Foods Private Limited , the only reason under which the revisional authority has remanded the matter to the assessing authority is no more available and therefore it has become infructuous, is against the legal position and therefore, based on such findings indicated in the impugned notice, the assessing authority cannot proceed to finalize the issue. The matters can be remanded back to the assessing authority - assessing authority shall provide four weeks time from the date of receipt of a copy of this order to the petitioner/assessee by fixing a date within the said four weeks by way of personal hearing to provide the documents and other inputs in support of the claim of the petitioner that their turn over is not more than Rs.300 Crores and on that date to be fixed in this regard, the petitioner shall appear and produce the documents - Petition disposed off.

Summary

Issues:
Assessment of purchase tax under Section 12(1)(c) of TNVAT Act, 2006 for the years 2008-09 to 2013-2014. Interpretation of legal provisions for exemption based on dealer's turnover below Rs.300 Crores. Validity of remand order by revisional authority. Compliance with principles of natural justice in assessment proceedings.

Analysis:
The judgment pertains to writ petitions related to the assessment years 2008-09 to 2013-2014, where the petitioner, a dealer in pulses and related items, was levied purchase tax under Section 12(1)(c) of the TNVAT Act, 2006. The revisional authority remanded the matter to the assessing authority, directing the petitioner to provide supporting documents to establish purchases from dealers with turnover below Rs.300 to Rs.500 Crores. The assessing authority issued notices for document submission and personal hearing, which the petitioner requested an extension for. However, the assessing authority, citing a Division Bench judgment, decided to confirm the tax levy proposal, leading to the petitioner filing writ petitions.

The petitioner argued that the remand was not solely based on a previous judgment but on the right to seek exemption if turnover is below Rs.300 Crores, as per Section 15 of the TNVAT Act. The assessing authority must independently evaluate the turnover claim and decide on merits after providing a fair opportunity to produce supporting documents. The Special Government Pleader contended that exemption hinges on turnover below Rs.300 Crores, and the legal position existed independently of the previous judgment.

The Court acknowledged the legal position under Section 15 of the TNVAT Act, providing exemption for items if turnover is below Rs.300 Crores. The revisional authority's remand was based on this legal provision, not solely on the previous judgment. Therefore, the assessing authority's decision to proceed based on the Division Bench judgment was deemed against the legal position. The Court ordered the assessing authority to provide a fair opportunity for the petitioner to submit documents supporting their turnover claim and to evaluate them independently within four weeks, disregarding the previous judgment.

In conclusion, the Court disposed of the writ petitions with directions for the assessing authority to reevaluate the matter in accordance with the legal provisions under Section 15 of the TNVAT Act and provide a fair opportunity for the petitioner to substantiate their claim of turnover below Rs.300 Crores. No costs were awarded, and connected miscellaneous petitions were closed.