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2025 (2) TMI 3 - HC - VAT / Sales TaxRejection of application filed by the petitioner to rectify the Assessment Orders that were earlier passed on 17.12.2019 for the Assessment Years 2016-2017 and 2017-2018 - writ petition was earlier dismissed for default due to non prosecution - HELD THAT - It is noticed that even as per the respondent the correct method for determination of the classification would be either before the Appellate Commissioner or before the Advance Ruling Authority. Prima facie it appears that the issue stands now covered in favour of the petitioner as the Appellate Commissioner has accepted the contentions of the petitioner that product manufactured and dealt by the petitioner was indeed animal supplement and was exempted in terms of Item No.5 Commodity Code No.705 of IV Schedule appended to TNVAT Act 2006 in terms of the above mentioned orders of the Appellate Deputy Commissioner. The impugned orders are set aside and the cases are remitted back to the respondent to pass a fresh order on merits and in accordance with the aforesaid order of the Deputy Appellate Commissioner (ST FAC). Needless to state the Department is entitled to take up the issue before the Appellate Forum as has been done against the order of the Appellate Deputy Commissioner dated 17.03.2023. Petition allowed by way of remand.
The petitioner challenged the orders passed under Section 84 of the Tamil Nadu Value Added Tax (TNVAT) Act, which rejected their application to rectify Assessment Orders for the years 2016-2017 and 2017-2018. The initial writ petitions challenging the Assessment Orders were dismissed due to non-prosecution but were later withdrawn upon the petitioner's request. Subsequently, the petitioner filed a Revision Petition under Section 54 of the TNVAT Act, which was dismissed. This led to the filing of an application under Section 84, culminating in the impugned order.
The core issue revolved around the classification of the petitioner's products, specifically calcium, digestive, vitamins, and minerals. The petitioner argued that these items were exempt from tax under Item 5, Commodity Code 705 of the IV Schedule of the TNVAT Act. In contrast, the department contended that these were medical products taxable at 5% under Entry 5 of Part B of the I Schedule. For the assessment years in question, the department further argued that the products did not qualify as medicinal products or animal supplements, thus attracting a 14.5% tax under Entry 69 of Part C of the I Schedule. The petitioner's contention was eventually accepted by the Appellate Deputy Commissioner for previous assessment years (2011-2012 to 2015-2016), who ruled that the products were indeed animal supplements and exempt from tax. This decision was based on the rulings of the Advance Ruling Authority, which had previously classified similar products as exempt. The Court noted that the proper method for determining product classification should be through the Appellate Commissioner or the Advance Ruling Authority. Given that the Appellate Commissioner had accepted the petitioner's classification for earlier years, the Court found that the issue was now covered in favor of the petitioner. Consequently, the impugned orders were set aside, and the cases were remitted back to the respondent for a fresh order in line with the Appellate Deputy Commissioner's findings. The Court allowed the writ petitions with consequential relief, noting that the Department could still pursue the matter before the Appellate Forum.
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