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2025 (3) TMI 840 - HC - VAT / Sales TaxChallenge to assessments made under the provisions of the Tamil Nadu Value Added Tax Act 2007 - denial of exemption claimed by the petitioner to which a detailed reply was filed by petitioner overruling which orders of assessment have come to be passed - HELD THAT - In the present case the GO clearly uses the term exercise notebooks and there can be no two views on the position that the notebooks manufactured by petitioners used by students for the purposes of academic exercises would satisfy that definition. In Maharaja Book Depot v State of Gujarat 1978 (10) TMI 148 - SUPREME COURT the Supreme Court considered the interpretation of the term paper in juxtaposition with the term exercise book holding that an exercise book was nothing but a collection of sheets of paper stitched together by a piece of string or pinned together and a substance used for writing. It would therefore clearly fall within ambit of the term paper . It does not the Bench holds lose the identity of paper merely because it is stitched together as a notebook. The notebooks manufactured by the Petitioner being only notebooks (ruled and unruled) used for the purposes of student exercises are entitled to the exemption sought. In light of discussion as aforesaid the findings and conclusions of the assessing officer in the impugned assessment orders to the effect that notebooks manufactured by petitioners do not satisfy the requirement of student exercise book is erroneous as is the denial of exemption. Conclusion - The notebooks manufactured by the Petitioner being only notebooks (ruled and unruled) used for the purposes of student exercises are entitled to the exemption sought. The impugned assessment orders are set aside and these writ petitions are allowed.
ISSUES PRESENTED and CONSIDERED
The core legal questions considered in this judgment revolve around the eligibility of the petitioner for tax exemption under the Tamil Nadu Value Added Tax Act, 2007 (TNVAT Act) regarding the sale of student notebooks. The issues include:
ISSUE-WISE DETAILED ANALYSIS Relevant legal framework and precedents: The legal framework involves the interpretation of the Tamil Nadu Value Added Tax Act, 2007, particularly the entries in Schedule I and Schedule IV, and the application of Government Order G.O.Ms. No. 79, which exempts certain types of notebooks from tax. The Court also referenced precedents such as Govindaswamy Binding Works v State of Andhra Pradesh and Maharaja Book Depot v State of Gujarat to interpret the terms used in tax statutes. Court's interpretation and reasoning: The Court analyzed the entries in the schedules to the TNVAT Act and the Government Order to determine the scope of the exemption. It focused on the terms "exercise notebooks" and "student notebooks," concluding that the notebooks manufactured by the petitioner, described as ruled and unruled exercise notebooks, fall within the exempted category under the Government Order. Key evidence and findings: The Court considered the petitioner's detailed reply to the pre-assessment notice, which clarified that the notebooks manufactured were either ruled or unruled exercise notebooks. This contradicted the assessing authority's claim that the petitioner failed to provide necessary details. Application of law to facts: The Court applied the exemption provisions of the Government Order to the facts presented by the petitioner. It found that the petitioner's products met the criteria for exemption as they were standard exercise notebooks used for student exercises, thus qualifying under the definition provided in the Government Order. Treatment of competing arguments: The petitioner argued that the exemption under G.O. 79 was applicable to their products, while the respondents contended that the petitioner failed to provide sufficient details to qualify for exemption. The Court favored the petitioner's position, noting that the petitioner had adequately addressed the pre-assessment notice queries and that the assessing authority's conclusions were unfounded. Conclusions: The Court concluded that the notebooks manufactured by the petitioner qualify for the tax exemption under the relevant Government Order. The assessing authority's decision to deny the exemption was deemed erroneous. SIGNIFICANT HOLDINGS Preserve verbatim quotes of crucial legal reasoning: The Court held: "The notebooks manufactured by the Petitioner being only notebooks (ruled and unruled) used for the purposes of student exercises, are entitled to the exemption sought." Core principles established:
Final determinations on each issue:
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