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2024 (11) TMI 2 - HC - VAT / Sales TaxLevy of Additional Sales Tax (AST) - turnover had not exceeded the threshold of Rs. 100 Crores during the year in question - challenge to amendment to the provisions of Section 2(1)(a) of the TNAST Act - HELD THAT - The amendment to the TNAST is effective from 01.08.1996. As a result of this amendment, the threshold for the levy of AST stood enhanced from Rs. 10.00 lakhs to Rs. 100 Crores. It is true that if the turnover of the writ petitioner is taken for the year in entirety, it would be less than a sum of Rs. 100 Crores. However for the purpose of assessment, the assessing authority is bound to apply the provisions of the Act strictly from their dates of insertion into the Act. Hence for the period 01.04.1996 to 31.07.1996, as the turnover of the petitioner is in the region of Rs. 15.66 Crores, which is far in excess of Rs. 10.00 lakhs, the petitioner cannot avoid liability under the TNAST Act. Writ Petition is dismissed.
Issues:
Challenge to levy of Additional Sales Tax (AST) based on threshold amount under Tamil Nadu Additional Sales Tax Act, 1970. Detailed Analysis: 1. Challenge to Levy of AST: The petitioner contested the imposition of Additional Sales Tax (AST) before the Appellate Assistant Commissioner (AAC) and subsequently before the Tamil Nadu Sales Tax Appellate Tribunal. The petitioner argued that the turnover did not exceed the threshold of Rs. 100 Crores during the relevant year, thus, AST should not be levied. 2. Amendment to TNAST Act: The petitioner's counsel highlighted an amendment to the Tamil Nadu Additional Sales Tax Act, which raised the threshold for AST levy from Rs. 10.00 lakhs to Rs. 100 Crores. The amendment aimed to bring parity among all dealers regarding the threshold for AST imposition. 3. Judicial Precedents: The petitioner relied on a Division Bench judgment in another case to support their argument that if the turnover for the entire year is below Rs. 100 Crores, there should be no liability for AST. However, the Commercial Taxes Department disagreed, citing the principle that amendments must be applied prospectively unless specified otherwise. 4. Court's Decision: After considering the arguments from both parties, the Court agreed with the Commercial Taxes Department. The Court emphasized that the amendment to the TNAST Act was effective from 01.08.1996, increasing the threshold for AST levy to Rs. 100 Crores. Therefore, even though the petitioner's total turnover for the year was below Rs. 100 Crores, the Court held that for the period in question, the petitioner's turnover exceeded the previous threshold of Rs. 10.00 lakhs, making them liable for AST. 5. Confirmation of Tribunal's Order: Ultimately, the Court upheld the Tribunal's decision and dismissed the Writ Petition, ruling in favor of the Commercial Taxes Department. The Court concluded that the petitioner could not avoid liability under the TNAST Act for the period specified, despite the overall turnover being below Rs. 100 Crores.
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