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2016 (11) TMI 671 - HC - VAT and Sales TaxRectification under section 55 of the TNGST Act - refund of the Additional Sales Tax - Held that - any dealer who is not liable to pay tax under the principal Act, either by reason of his not having sufficient gross turnover of goods or by reason of exemption given under section 7 of the principal Act, is not liable to pay the additional sales tax. If a dealer is exempted by the State Government under the second proviso to section 3(1) of the Act of 1975, he is also not liable to pay the additional sales Tax. Further, the turnover in respect of goods whose sales or purchases are not taxable under the principal Act in the hands of any dealer by reason of section 8 of the principal Act is not liable to the payment of additional tax by reason of the first proviso to section 3(1). Any other turnover which is exempted by the State Government under the second proviso to section 3(1) is also not liable to additional tax - the only conclusion that could be arrived it is that the turnover in respect of the goods, which is sales or purchases are not taxable under the principal Act in the hands of any dealer by reason of section 8 of the principal Act, is not liable to payment of additional tax. Writ Petition allowed - the impugned order quashed and the respondent is directed to extend the benefit of the exemption notification and effect the refund of the Additional Sales Tax paid by the petitioner, by considering their claim date 18.07.2013, under section 55 of the TNGST Act. The above direction shall be complied with by the respondent, within a period of eight weeks
Issues:
- Application for rectifying an error in the order of assessment for the assessment year 2006-2007 and to effect refund of the Additional Sales Tax paid. - Interpretation of the Government notification regarding exemption from tax, Surcharge, and Additional Sales Tax. - Exercise of power under section 55 of the TNGST Act for rectification. - Legal entitlement to exemption from Additional Sales Tax. - Compliance with the decision in N.KUPPANA GOUNDER case. - Application of the decision in ASHOK SERVICES CENTRE AND ANOTHER v. STATE OF ORISSA. - Impact of the decision in HSI AUTOMOTIVES LIMITED v. THE STATE OF TAMIL NADU. Analysis: 1. The petitioner, a registered dealer engaged in manufacturing two-wheeler spare parts, sought rectification of an error in the assessment order for the year 2006-2007 and refund of Additional Sales Tax paid. The issue stemmed from the Government notification granting exemptions under different categories, including Additional Sales Tax. 2. The crux of the matter lies in the interpretation of the Government notification regarding exemptions. The petitioner claimed exemption under Notification No.II, which dealt with Additional Sales Tax on three-wheelers. However, the authorities denied the exemption for Additional Sales Tax, leading to the rectification application under section 55 of the TNGST Act. 3. The judgment emphasized the proper exercise of power under section 55 of the TNGST Act for rectification purposes. Referring to the N.KUPPANA GOUNDER case, it highlighted that authorities must not discountenance rectification requests without reason and should consider submissions made by the dealer seeking rectifications. 4. The legal entitlement to exemption from Additional Sales Tax was a pivotal issue. The petitioner argued that the exempted turnover should not be subject to Additional Sales Tax, citing statutory provisions and the nature of the Additional Sales Tax as a surcharge. 5. The judgment extensively applied the decision in ASHOK SERVICES CENTRE AND ANOTHER v. STATE OF ORISSA to determine the liability for Additional Sales Tax. It clarified that dealers not liable to pay tax under the principal Act or exempted by the State Government are not liable for Additional Sales Tax. 6. The impact of the decision in HSI AUTOMOTIVES LIMITED v. THE STATE OF TAMIL NADU was crucial in establishing that taxable turnover for the General Sales Tax Act and Additional Sales Tax Act should align. Any error in treating exempted sales as taxable turnover could lead to incorrect levies and penalties. 7. Consequently, the judgment allowed the Writ Petition, quashed the impugned order, and directed the respondent to extend the benefit of the exemption notification and refund the Additional Sales Tax paid by the petitioner. The decision was based on legal entitlement, statutory provisions, and precedents cited in the analysis.
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