2020 (8) TMI 339 - HC - VAT and Sales Tax

Levy of tax at the rate of 12.5% on the entire taxable turn over - reversal of the Input Tax Credit - benefit of presumptive tax scheme - petitioner is eligible for the assessment under Section 3 (4) (b) of the Tamil Nadu Value Added Tax Act - HELD THAT - The amendment to Section 3(4) of the TNVAT Act would have to be applied retrospectively - The revised assessment order giving a prospective effect to Section 3 (4) b from 01.04.2012, may not be correct. Accordingly, the proceedings itself requires to be reconsidered by the respondent. The impugned order of the respondent is hereby set aside and the matter is remanded back to the respondent for fresh consideration - Petition allowed by way of remand.

Summary

Issues:
Revised assessment order levying tax at 12.5% on entire taxable turnover and reversal of Input Tax Credit (ITC) under Section 3 (4) (b) of TNVAT Act.

Analysis:
The Writ Petition challenges the revised assessment order imposing tax at 12.5% on the entire taxable turnover and reversing Input Tax Credit (ITC) despite eligibility for assessment under Section 3 (4) (b) of the TNVAT Act. The petitioner relies on previous judgments highlighting the retrospective application of amendments to Section 3(4) of the TNVAT Act. The court emphasizes the need for clarity in the interpretation and application of amendments, especially regarding the liability to tax for turnovers exceeding a specified amount. The court refers to the Statement of Objects & Reasons for the 2011 amendment, emphasizing the correction of unintended anomalies in the law. A previous judgment in a similar case involving timber sales supports the retrospective application of the Act, setting a precedent for the current case.

The court finds the revised assessment order incorrectly giving a prospective effect to Section 3 (4) (b) from 01.04.2012. Consequently, the court sets aside the impugned order and remands the matter back to the respondent for fresh consideration. The respondent is directed to reevaluate the case based on the court's findings and merits, ensuring a decision within 12 weeks. The petitioner's argument is deemed acceptable, considering the principle of consistency and the unchallenged nature of the previous judgment. The Writ Petition is disposed of with the stated directions, and the connected Miscellaneous Petition is closed without costs.