2018 (1) TMI 292 - HC - VAT and Sales Tax

Rate of tax - supplies effected to educational institutions established by the Government - whether taxable under Schedule II Part B at the rate of 5% as per the amended Commodities list under CTD portal? - Held that - similar issue decided in the case of Consolidated Engineering Services Versus The Commercial Tax Officer 2016 (6) TMI 1273 - MADRAS HIGH COURT , where it was held that the issue is squarely covered by the decision in the case of Technomed Electronics and another Vs. CTO, Thiruvanmiyur Assessment Circle, and another 2009 (1) TMI 821 - MADRAS HIGH COURT , where it was held that the order, dated March 31, 2008 passed by the Commercial Tax Officer, Thiruvanmiyur Assessment Circle, disallowing the concessional rate of tax at five per cent on the sales to educational institutions is set aside. Matter remanded back to the respondent to take note of the decision rendered in the above referred cases and extend the concessional rate of tax to the petitioner by redoing the assessment - Petition allowed by way of remand.

Summary

Issues:
Interpretation of tax rates for sales to educational institutions.

Analysis:
The petitioner sold scientific equipment to educational institutions and claimed a tax rate of 5% under Schedule II Part B. The respondent rejected this, stating that sales to the government are treated as sales to unregistered dealers and are taxable at 14.5%. The Assessing Officer supported this stance. The issue was previously addressed in a similar case where the court allowed the writ petition, citing relevant legal precedents.

The court referred to a previous case where the issue of concessional tax rates for sales to educational institutions was discussed. The court held that registered dealers selling goods to educational institutions are entitled to concessional tax rates without the need for 'C'/'D' forms. The court highlighted that the amendment to the Central Sales Tax Act does not apply to sales of scientific equipment to educational institutions or hospitals.

Based on the legal position established in previous cases, the court found that the respondent's reasoning for denying the concessional tax rate to the petitioner was incorrect. The court allowed the writ petitions, set aside the impugned orders, and remanded the matter back to the respondent to apply the concessional tax rate based on the established legal principles. No costs were awarded in the judgment, and the connected Miscellaneous Petitions were closed.