2016 (4) TMI 1013 - HC - VAT and Sales Tax

Payment of VAT - Invisible loss of yarn pursuant to manufacturing activity - Held that - matter is covered by the decision of this court in the case of Interfit Techno Products Ltd., vs. The Principal Secretary, Commissioner of Commercial Taxes 2015 (4) TMI 935 - MADRAS HIGH COURT . Therefore, by following the same, the matter is disposed of. - Matter disposed of

Summary

Issues involved:
Challenge to impugned orders related to payment of VAT on invisible loss of yarn post manufacturing activity.

Analysis:

1. Challenge to impugned orders:
The petitioner filed writ petitions challenging the orders dated 27.04.2015 passed by the respondent regarding the payment of VAT on invisible loss of yarn. The matter had been previously addressed by the High Court in a batch of writ petitions in a specific case, setting a precedent. The petitioner sought similar relief based on the previous decision.

2. Interpretation of previous judgment:
The judgment in the previous case highlighted that the assessing officer should not adopt a uniform percentage for invisible loss and reverse the input tax credit without proper examination of the manufacturing process. The court emphasized the need for a detailed fact-finding exercise to ascertain the actual loss and ensure compliance with the provisions of the VAT Act.

3. Application of statutory provisions:
The court clarified that Section 18 of the TNVAT Act is not an independent provision but is subject to other provisions, including Section 19. It was emphasized that a dealer claiming refund under Section 18(2) must demonstrate that the claim is not restricted by any conditions under Section 19. The Assessing Authority is required to thoroughly examine the quantum of loss and ensure that the representation by the dealer is justified.

4. Disposal of writ petitions:
Based on the previous judgment and the interpretation of statutory provisions, the court disposed of the writ petitions, directing the respondent to follow the guidelines set in the earlier decision. The court set aside all notices issued for reopening and reversing input tax credit based on a uniform percentage for invisible loss. The Assessing Officer was granted liberty to issue appropriate show cause notices and proceed in accordance with the law.

5. Conclusion:
The court concluded by disposing of the writ petitions in alignment with the previous order and directed the respondent to adhere to the guidelines provided. No costs were awarded, and the connected miscellaneous petitions were closed accordingly.

This detailed analysis of the judgment provides insights into the issues raised, the interpretation of previous decisions, the application of statutory provisions, and the final disposal of the writ petitions.