9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2020 (2) TMI 472 - HC - VAT and Sales TaxDemand of tax - goods manufactured and sold by the petitioner - inter-state sale - Residuary Entry No. 69, Part C to the 1st Schedule of the Tamil Nadu VAT Act, 2006 - HELD THAT - Presence of Entry 25 to Part B to the 1st Schedule to Tamil Nadu Vat Act, 2006 can be explained and only justified for the above reasons as otherwise the said entry is of no relevance except for payment of tax at higher rate for it to be availed as an input tax credit for use in the factory for manufacture within the state. In case of sale in the course of an inter-state sale or commerce to a registered dealer in another state, a registered dealer has to pay tax at the lower of the two rates whereas in the case of sale in the course of inter-state trade and commerce to a person who is not a registered dealer, CST is payable at the rate applicable to the goods within State - During the period in dispute, goods falling under Part B of the 1st Schedule of the Tamil Nadu Vat Act, 2006 were liable to tax at 4%. It is the contention of the petitioner that it sold capital goods as defined in section 2 (11) of the Tamil Nadu Vat Act, 2006 and therefore was liable to pay tax at the lower rate under Entry 25, Part B of the 1st Schedule of the Tamil Nadu Vat Act, 2006. In the present case, neither the petitioner nor the respondent have clearly explained as to whether the goods traded and sold by the petitioner in the course of Inter-state sale fall under Sectioin 2(11) (a) or under Section 2(11) (b) to (g) of the Tamil Nadu Vat Act, 2006. Matter remanded back to respondent for re-examination - appeal allowed by way of remand.
Issues Involved:
1. Legitimacy of the impugned assessment order. 2. Classification of goods as "capital goods" under the Tamil Nadu VAT Act, 2006. 3. Applicability of tax rates under the CST Act, 1956 and Tamil Nadu VAT Act, 2006. 4. Availability of alternate remedies and jurisdiction of writ courts under Article 226 of the Constitution of India. Detailed Analysis: 1. Legitimacy of the Impugned Assessment Order: The petitioner challenged the impugned assessment order dated 25.10.2013, which demanded tax on goods manufactured and sold by the petitioner under Residuary Entry No. 69, Part C to the 1st Schedule of the Tamil Nadu VAT Act, 2006, at a rate of 14.5%. The petitioner argued that the goods should be taxed at 4% under Entry No. 25, Part B of the 1st Schedule of the Tamil Nadu VAT Act, 2006, as they qualify as "capital goods" as defined in Section 2(11) of the Act. 2. Classification of Goods as "Capital Goods": The petitioner contended that the goods in question were "capital goods" as per Section 2(11) of the Tamil Nadu VAT Act, 2006. The definition includes plant, machinery, equipment, apparatus, tools, appliances, or electrical installations for producing, making, extracting, or processing any goods, among other categories. The petitioner relied on various judicial precedents, including the Gujarat High Court's decision in State of Gujarat vs. Reliance Industries Ltd., and the Division Bench of the Madras High Court in M/S. Schwing Stetter (India) Pvt. vs. The Commissioner of Commercial Tax Officer, which upheld the validity of the definition of "capital goods." 3. Applicability of Tax Rates: The petitioner argued that under Section 6 of the CST Act, 1956, read with Section 8(1) and (2), the goods should be taxed at 4% as applicable to capital goods. The respondent, however, classified the goods under Residuary Entry No. 69, Part C, leading to a higher tax rate of 14.5%. The court noted that if the goods fell under sub-clause (a) of Section 2(11), they would be taxed at 4%, but if they fell under sub-clauses (b) to (g), they would be taxed at the higher rate under Residuary Entry 69. 4. Availability of Alternate Remedies and Jurisdiction of Writ Courts: The petitioner argued that the writ court could entertain the petition under Article 226 of the Constitution of India, as there were no disputed questions of fact, only legal issues. The respondent countered that the petitioner had an effective and alternative remedy before the Appellate Commissioner. The court found the petitioner's submission legitimate and decided to entertain the writ petition. Conclusion: The court concluded that neither the petitioner nor the respondent clearly explained whether the goods fell under Section 2(11)(a) or (b) to (g) of the Tamil Nadu VAT Act, 2006. Therefore, the impugned order was set aside, and the case was remitted back to the respondent for a fresh order, considering the Division Bench's decision in M/S. Schwing Stetter (India) Pvt. vs. The Commissioner of Commercial Tax Officer. The respondent was directed to pass a speaking order within three months, allowing the petitioner to be heard and file additional representations if necessary. Disposition: The writ petition was disposed of with the above observations, with no costs. Connected miscellaneous petitions were also closed.
|
