2014 (1) TMI 49 - HC - VAT and Sales Tax

Levy of additional sales tax - Whether Additional Sales Tax can be levied if the taxable turnover is less than 100 crores - Held that - after taking the taxable turnover for the entire year, the taxable turnover upto the date of amendment has to be assessed with reference to the relevant tax rate therein applicable to the period - matter is remanded back to the Assessing Officer to work out the liability - Thus, taking the taxable turnover for the entire year, the taxable turnover up to the period 31st July 1996, has to be worked out to attract the liability at the rates specified therein and beyond that, the liability of the turnover has to be worked out based on the amended provision depending on the taxable turnover crossing ₹ 100 crores for the whole year - Following decision of State of Tamil Nadu Vs. Tvl. National Time Company 2010 (7) TMI 842 - MADRAS HIGH COURT - Decided in favour of Revenue.

Summary

Issues:
1. Interpretation of Additional Sales Tax Act, 1970 regarding levy based on taxable turnover.
2. Applicability of Section 2(1)(aa) of the Additional Sales Tax Act, 1970 as amended by Act 31 of 1996.
3. Levy of Additional Sales Tax for the period from 01.04.1996 to 31.07.1996.

Issue 1:
The High Court considered the Revenue's revision against the Sales Tax Appellate Tribunal's order for the assessment year 1996-97. The main issue was whether Additional Sales Tax could be levied if the taxable turnover is less than 100 crores. The Court referred to the decision in the case of State of Tamil Nadu Vs. National Time Company, stating that the taxable turnover up to the date of amendment must be assessed with reference to the relevant tax rate applicable to that period. The Court set aside the Tribunal's order and remanded the matter to the Assessing Officer to calculate the liability based on the Court's decision. It was clarified that the taxable turnover up to 31st July 1996 should attract liability at specified rates, while turnover beyond that date should be assessed based on the amended provision for taxable turnover exceeding 100 crores for the whole year.

Issue 2:
The Court addressed the applicability of Section 2(1)(aa) of the Additional Sales Tax Act, 1970 as amended by Act 31 of 1996. It was determined that the amended provision should be applied for taxable turnover exceeding 100 crores for the entire year. The Court's decision emphasized the importance of assessing liability based on the relevant tax rates applicable to different periods within the assessment year.

Issue 3:
Regarding the levy of Additional Sales Tax for the period from 01.04.1996 to 31.07.1996 under the Additional Sales Tax Act, 1970, the Court's ruling clarified the methodology for calculating liability based on the taxable turnover. The judgment provided a clear directive that the turnover up to 31st July 1996 should be assessed at specified rates, while turnover beyond that date should be evaluated based on the amended provision applicable to taxable turnover exceeding 100 crores for the entire year.

In conclusion, the High Court's judgment in the case addressed the interpretation of the Additional Sales Tax Act, 1970, the applicability of specific provisions, and the methodology for calculating liability based on taxable turnover for the assessment year 1996-97. The decision provided a comprehensive analysis and directive for the assessment process, ensuring clarity on the application of tax rates and provisions based on different periods within the assessment year.