Allowed

Intex Technologies (I) Ltd. v. the State of Tamil Nadu

Madras HC8 Feb 2021WP/7251/2006

Case brief

AI extract

What is this about?

The High Court disposed of multiple writ petitions challenging revenue assessment orders. Relying on prior judgments, the Court held that switches, hubs, and routers qualify as computer peripherals liable for 4% tax. It set aside the impugned orders and directed the respondents to pass fresh assessments.

What did the court decide?

Ruling that switches, hubs, and routers are computer peripherals taxable at 4%; set aside impugned revised assessment orders; remanded for fresh orders within three months.

Intex Technologies (I) Ltd. Vs the State of Tamil Nadu — Cheque Dishonour | Madras HC (2021)

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IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 08.02.2021 CORAM:

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THE HON'BLE MR.JUSTICE C.SARAVANAN

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W.P. Nos. 7251 to 7255 of 2006 and W.M.P. Nos. 7959 to 7962 & 7964 of 2006

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Intex Technologies (I) Ltd., No.7, Wallers Road, Now at No.23, Wallers Road, Chennai – 600 002. Represented by its Company Secretary, Gaurav Arora. ... Petitioner in all W.Ps Vs 1.The State of Tamil Nadu, Represented by its Secretary, Commercial Taxes Department, Fort St.George, Chennai-9. 2.The Special Commissioner and Commissioner of Commercial Taxes, Ezhilagam, Chepauk, Chennai – 600 005. 3.The Commercial Tax Officer (FAC), Chintadripet Assessment Circle, No.62, Cathedral Raod, Chennai – 600 086. ... Respondents in all W.Ps

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Prayer in W.P.No.7251 of 2006: Writ Petition filed under Article 226 of the Constitution of India to issue a Writ of Certiorari, calling for the records comprised the Clarification Circular No.181/2005 D.Dis.Acts CellII/13694/2005 dated 3.11.2005, on the files of the Second Respondent herein and quash the same.

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Prayer in W.P.No.7252 of 2006: Writ Petition filed under Article 226 of the Constitution of India to issue a Writ of Certiorarified Mandamus, calling for the records in TNGST/0581453/2003-04 dated 1.2.2006, on the file of the third respondent and quash the same and consequently direct the third respondent herein to collect tax at 4% as per the first proviso to Section 3(2) of the Tamil Nadu General Sales Tax Act, 1959 on the sales of hub Ethernet as accessory to computers, or classify the item hub Ethernet as peripherals to computers falling under Entry 18(i) of Part B of the First Schedule to the Tamil Nadu General Sales Tax Act, 1959.

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https://hcservices.ecourts.gov.in/hcservices/

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Prayer in W.P.No.7253 of 2006: Writ Petition filed under Article 226 of the Constitution of India to issue a Writ of Certiorarified Mandamus, calling for the records in TNGST/0581453/2001-02 dated 1.2.2006, on the file of the third respondent and quash the same and consequently direct the third respondent herein to collect tax at 4% as per the first proviso to Section 3(2) of the Tamil Nadu General Sales Tax Act, 1959 on the sales of hub Ethernet as accessory to computers, or classify the item hub Ethernet as peripherals to computers falling under Entry 18(i) of Part B of the First Schedule to the Tamil Nadu General Sales Tax Act, 1959.

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Prayer in W.P.No.7254 of 2006: Writ Petition filed under Article 226 of the Constitution of India to issue a Writ of Certiorarified Mandamus, calling for the records in TNGST/0581453/2002-03 dated 1.2.2006, on the file of the third respondent and quash the same and consequently direct the third respondent herein to collect tax at 4% as per the first proviso to Section 3(2) of the Tamil Nadu General Sales Tax Act, 1959 on the sales of hub Ethernet as accessory to computers, or classify the item hub Ethernet as peripherals to computers falling under Entry 18(i) of Part B of the First Schedule to the Tamil Nadu General Sales Tax Act, 1959.

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Prayer in W.P.No.7255 of 2006: Writ Petition filed under Article 226 of the Constitution of India to issue a Writ of Certiorari, calling for the records comprised the Clarification Circular No.192/2004 D.Dis.Acts CellII/50103/2003 dated 29.07.2004, on the file of the Second Respondent herein and quash the same.

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COMMON ORDER

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By this Common Order all the writ petitions are being disposed of.

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The petitioner has challenged the revised assessment orders primarily on the ground that the respondents had wrongly relied on the clarifications dated 29.07.2004.

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Though elaborate arguments were advanced by the learned counsel for the petitioner, it was submitted that these writ petitions may be allowed in terms of the decision of this Court in M/s.Dax Networks Ltd. Vs The Commissioner of Commercial Taxes, 2017 (11) TMI 929 in W.P.No.39115 of 2005 & W.P.No.19693 of 2007 vide order dated 06.11.2017 and another https://hcservices.ecourts.gov.in/hcservices/

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Decision of this Court in The State of Tamil Nadu, Represented by The Joint Commissioner (CT) Vs CMC Limited., [2014] 75 VST 413(Mad).

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In Paragraph 13, this Court in M/s.Dax Networks Ltd. Vs The Commissioner of Commercial Taxes, 2017 (11) TMI 929 held as under:-

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“13. Thus, the appropriate classification of switches, hubs and routers dealt with by the petitioner should undoubtedly fall under Entry 18 (i) in Part B of the first schedule to the TNGST. The counter affidavit filed by the second respondent does not render much assistance to the case of the respondent/Department. One more factor, to be taken into consideration is the proceedings of the Authority for Clarification and Advance Ruling under Section 60 of the Karnataka Value Added Tax Act, 2003. Though the clarification given by the said Authority will not bind the respondent, it will be a good indicator, as to how, the products dealt with by the petitioner have been considered under the Karnataka Value Added Tax Act, 2003. In the said communication, the petitioner had sought for clarification as regards the rate of tax for switches, hubs and routers as computer peripherals and the Advance Ruling Authority, after examining the matter, found that switches and hubs falls under Central Excise Tariff under 8473; routers falls under Central Excise Tariff heading 8517; as also cables, fall under Central Excise Tariff heading 8544; and are enumerated as Serial Nos. 25 and 30 of Notification, dated 30.04.2005 and Serial No.117, in notification, dated 30.04.2005 respectively and they are liable to tax at 4%. The Central Excise Tariff heading 8473, deals with computer systems and peripherals.”

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In Paragraph 10, this Court in The State of Tamil Nadu, Represented by The Joint Commissioner (CT) Vs CMC Limited., [2014] 75 VST 413(Mad) held as under:-

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“10. It is not in dispute that 'router' is a device falling outside the main part, namely, computer and it is partially or completely dependent on the host and expands the capabilities of the computer and it does not form part of the core architecture. What are all computer peripherals have not been defined in Serial No.22 https://hcservices.ecourts.gov.in/hcservices/ of Entry 68 of Part B of I Schedule to TNVAT Act,

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Therefore, whatever goods, which are falling within the definition of 'peripheral' would be entitled to such a benefit. We find that 'router', from the nature of its use in conjunction with the computer as has been defined by the Appellate Deputy Commissioner and the Tribunal based on relevant computer related dictionary and data, is a peripheral of a computer. It is also held by the Tribunal that 'router' is a computer network device that transmits data from one area to another and expands the capabilities of the computer, hence, it does not form part of core computer architecture. Therefore, we find that the Appellate Deputy Commissioner as well as the Tribunal are justified in holding that the goods sold by the assessee, namely, router, is a computer peripheral, falls under Serial No.22, Entry 68 of Part B of I Schedule of TNVAT Act, 2006.”

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I am therefore inclined to dispose these writ petitions by setting aside the impugned revised Assessment Orders dated 01.02.2006 for the Assessment Years 2001-2002 to 2003-2004 and by directing the respondents to pass a fresh order in terms of the aforesaid decisions of this Court cited above and in accordance with law.

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In the light of the above discussion, the assessment orders passed by the 3^rd respondent are set aside and the case is remitted back to the respondents to pass a fresh order within a period of three months from the date of receipt of a copy of this order.

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The petitioner is given liberty to file a reply/representation within a period of 30 days from the date of receipt of a copy of this order. It is needless to state that before passing final order, the respondents shall also call upon the petitioner either in person or through video conferencing.

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These Writ Petitions stand disposed of with the above observations and directions. No costs. Consequently, connected Writ Miscellaneous Petitions are closed.

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Sd/Assistant Registrar(CS VIII)

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//True Copy//

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Sub Assistant Registrar

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arb https://hcservices.ecourts.gov.in/hcservices/

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To
1.The State of Tamil Nadu,
Represented by its Secretary,
Commercial Taxes Department,
Fort St.George, Chennai-9.
2.The Special Commissioner and
Commissioner of Commercial Taxes,
Ezhilagam, Chepauk,
Chennai – 600 005.
3.The Commercial Tax Officer (FAC),
Chintadripet Assessment Circle,
No.62, Cathedral Raod,
Chennai – 600 086.
+1cc to Mr.R.Karthikeyan , Advocate SR.No. 7126
+1 cc to Spl Government Pleader Sr.No. 7216
W.P. Nos. 7251 to 7255 of 2006
RSI CO
A.SK(10.03.2021)

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https://hcservices.ecourts.gov.in/hcservices/

Intex Technologies (I) Ltd. v. the State of Tamil Nadu

Case brief

What is this about?

What did the court decide?

Intex Technologies (I) Ltd. v. the State of Tamil Nadu

Case brief

What is this about?

What did the court decide?

What the court decided

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