9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (4) TMI 597 - HC - VAT and Sales TaxValidity of assessment orders in respect of turnover from the manufacture of kraft paper - reversal of Input Tax Credit - basis for reversal was that sale of the goods to SEZ in other States are exempt from payment of tax and ITC is impermissible in terms of such exempted sales - HELD THAT - The question of reversal of ITC in regard to supply made to SEZ was considered by a Division Bench of this Court in W.A.No.703 of 2020 Batch in the case of M/S. CONSOLIDATED CONSTRUCTION CONSORTIUM LTD. VERSUS THE ASSISTANT COMMISSIONER (CT) 2023 (3) TMI 884 - MADRAS HIGH COURT . In conclusion, the assessments have been remanded to the Assessing authority for fresh consideration . In light of the aforesaid order, the impugned assessment also stands remanded.
Issues:
The judgment deals with challenges to two assessment orders under the TNVAT Act regarding turnover from the manufacture of kraft paper, specifically related to sales to Special Economic Zones (SEZ) and the reversal of Input Tax Credit (ITC) under the CST Act. Assessment of Turnover: The petitioner, a registered dealer under the TNVAT Act, contested two assessment orders concerning turnover from the manufacture of kraft paper, including sales to SEZ units. The respondent proposed to reverse ITC based on the CST Act, claiming that sales to SEZ units in other states are exempt from tax, thus ITC is impermissible. However, it was found that the basis for reversal was erroneous as the records did not support the claim made in the audit objections. Legal Interpretation and Remand: A Division Bench of the Court considered the issue of ITC reversal for sales to SEZ units and concluded that the benefits of Zero Rate and refund under Section 18 of the TNVAT Act are independent. Export of goods is not a prerequisite for Zero Rate sales under Section 18(1), while export is necessary for claiming refunds under Section 18(2) and 18(3). The judgment clarified that Zero Rate is distinct from exemption, and the impugned circular was set aside for being contrary to the law. It was emphasized that Section 18 of the TNVAT Act cannot be restricted by notifications under Section 30, allowing assesses to claim a larger benefit. The term "sale" in Section 18 includes various types of sales as defined under Section 2(33) of the TNVAT Act. Remand and Directions: In light of the Division Bench's order, the impugned assessment was also remanded. The respondent was directed to issue a notice to the petitioner, provide a hearing, and pass orders in accordance with the Division Bench's decision within twelve weeks from receiving a copy of the order. No costs were awarded, and connected miscellaneous petitions were closed.
|
