2023 (1) TMI 796 - HC - VAT and Sales Tax

Reversal of Input Tax Credit - interstate sale of goods - applicability of proviso to Section 19 (2) (v) of the TNVAT Act to manufacturers also or not - HELD THAT - The issue decided in the case of THE STATE OF TAMIL NADU REPRESENTED BY ITS SECRETARY COMMERCIAL TAXES DEPARTMENT, THE DEPUTY COMMISSIONER (CT) (FAC) VERSUS M/S. EVEREST INDUSTRIES LIMITED 2022 (4) TMI 1204 - MADRAS HIGH COURT where it was held that When the power to the statutory authority is granted upto five years to modify the order, it cannot be said that the constitutional authorities would not have power to review the action. Therefore, concurring with the Division Bench, we do not concur with the decision of the Learned Judge to dismiss the writ petitions on the technicality of limitation, that too, when the batch was pending. Appeal disposed off.

Summary

Issues:
Challenging the applicability of the proviso to Section 19(2)(v) of the TNVAT Act to manufacturers.

Analysis:
The writ appeals were filed by the Revenue challenging the order that the proviso to Section 19(2)(v) of the TNVAT Act is not applicable to manufacturers. The judgment referred to a previous case and concluded that the appeals filed by the State were partly allowed. Another case was mentioned where the writ petitions were dismissed as barred by limitation based on a decision of the Apex Court. The judgment highlighted the importance of exercising jurisdiction under Article 226 of the Constitution of India within certain parameters, such as unfairness, unreasonableness, perversity, lack of jurisdiction, or violation of natural justice by the Statutory Authority.

The judgment further discussed the wide powers of the High Courts under Article 226 and the need to exercise restraint in entertaining writ petitions. It emphasized that the Court must consider the legislative intent and exercise jurisdiction consistent with the provisions of the Act. The judgment also clarified that the High Court's power under Article 226 should not be circumscribed by limitation but by the theory of laches, and it could set aside any levy or demand made without the authority of law. Additionally, it was noted that Section 84 of the TNVAT Act empowers rectification of orders within five years for factual and legal errors.

In conclusion, the judgment disposed of the writ appeals in accordance with the previous judgment, partially allowing the appeals filed by the Revenue and the writ petitions filed by the assessees. It granted liberty to file an appeal before the appellate authority in a specific case and closed the connected miscellaneous petitions without any order as to costs.

This comprehensive analysis of the judgment highlights the key legal issues, the arguments presented, and the conclusions reached by the Court regarding the applicability of the proviso to Section 19(2)(v) of the TNVAT Act and the exercise of jurisdiction under Article 226 of the Constitution of India.