A writ petition challenging Additional Sales Tax levied for April-July 1996, where the petitioner argued post-amendment turnover threshold exemption. The High Court dismissed the plea, holding amendments apply prospectively.
Writ petition dismissed; the order of the Sales Tax Appellate Tribunal dated 11.12.2007 is confirmed.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
2024:MHC:3623
W.P.No.15039 of 2008
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Dated: 22.10.2024
CORAM
THE HONOURABLE DR. JUSTICE ANITA SUMANTH and THE HONOURABLE MR. JUSTICE G.ARUL MURUGAN
Writ Petition No.15039 of 2008
Indian Rayon & Industries Limited, represented by its Senior Vice President, B.Venugopal, 304-E T.T.K. Road, Alwarpet, Chennai 600 018.
.... Petitioner
Vs
PRAYER: PETITION under Article 226 of the Constitution of India praying for issuance of writ of Certiorarified Mandamus to call for the records on the files of the Second Respondent herein, in T.A.No.180/2004 dated 11.12.2007 and quashing the confirmation of the turnover tax under the Tamil Nadu Additional Sales Tax Act, 1970 for the period, from 01.04.1996 to 31.07.1996, as ordered by the First Respondent in its proceedings in T/0700221/96-97 dated 29.11.2002, and direct refund of Rs.39,15,011/-. https://www.mhc.tn.gov.in/judis
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W.P.No.15039 of 2008
For Petitioner : Mr.K.A.Parthasarathy for Mr.N.Inbarajan
For Respondents : Mr.Haja Nazirudeen, Additional Advocate General assisted by Mr.G.Nanmaran (for R1) Special Government Pleader
Tribunal – R2
O R D E R (Order of the Court was made by Dr.ANITA SUMANTH,J.)
The petitioner challenges order of the Tamil Nadu Sales Tax Appellate
Tribunal (in short 'STAT'/'Tribunal') dated 11.12.2007. The petitioner had
suffered an order of assessment for the period 1996-97 by proceedings dated 24.08.1999. On appeal, the assessment was remanded to the Assessing Officer by the Appellate Assistant Commissioner (AAC), vide proceedings dated 17.01.2001. While giving effect to the remand order, Additional Sales Tax (AST) had been levied on taxable turnover of a sum of Rs.15,66,00,424/- for the period 01.04.1996 to 31.07.1996 in terms of the provisions of the Tamil Nadu Additional Sales Tax Act, 1970 (in short 'TNAST Act').
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order of the Tribunal drawing attention to the position that there had been an amendment to the provisions of the TNAST Act, as per which, the threshold for the levy of AST stood enhanced from a sum of Rs.10.00 lakhs to Rs.100 Crores.
Special Tribunal which by its order in Siemens Ltd. V. State of Tamil Nadu (110 STC 313) held the same to be ultravires striking down clause (a) of Section 2 (1) of the TNAST Act. Hence parity was brought amongst all dealers in the threshold to be maintained for the levy of AST. The extant position in law hence, is that the threshold for levy of AST in terms of Section (2) of the TNAST Act stood amended, enhancing the threshold from Rs.10.00 lakhs to Rs.100 Crores with effect from 01.08.1996. There is no dispute on this position.
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W.P.No.15039 of 2008
Siemens Ltd., the Division Bench of this Court states as follows:
'8. Even assuming that there was no liability to pay and there was no provision regarding payment of additional sales tax between April 1, 1996 and July 31, 1996, the annual turnover of the petitioner for the assessment year 1996-97 was admittedly more than Rs.100 crores. It is immaterial that the taxable turnover for the period from August 1, 1996 to March 31,1997 did not exceed Rs.100 crores. Even assuming that the liability to pay additional sales tax arose only with effect from August 1, 1996, the contention that the taxable turnover after the said date alone could be considered is also not tenable. The assessing officer was justified in coming to a conclusion that the taxable turnover for the period beween April 1, 1996 and March 31, 1996 being more than Rs.100 crores, the petitioner was liable to pay additional sales tax even as per the amended provision as contained in section 2(1)(aa).'
above, there should be no liability for AST at all based on the factual position that the entirety of its turnover was less than Rs.100 crores.
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W.P.No.15039 of 2008
threshold for the levy of AST stood enhanced from Rs.10.00 lakhs to Rs.100 Crores.
entirety, it would be less than a sum of Rs.100 Crores. However for the purpose of assessment, the assessing authority is bound to apply the provisions of the Act strictly from their dates of insertion into the Act. Hence for the period 01.04.1996 to 31.07.1996, as the turnover of the petitioner is in the region of Rs.15.66 Crores, which is far in excess of Rs.10.00 lakhs, the petitioner cannot avoid liability under the TNAST Act.
dated 11.12.2007. This Writ Petition is dismissed. No costs.
(A.S.M.,J) (G.A.M.,J) 22.10.2024
Index:Yes Speaking order Neutral Citation: Yes sl
To
2.The Secretary, Sales Tax Appellate Tribunal (Main Bench), City Civil Court Buildings High Court Complex Chennai 600 104.
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W.P.No.15039 of 2008
DR. ANITA SUMANTH,J. and MR. G.ARUL MURUGAN,J.
sl
W.P.No.15039 of 2008
22.10.2024
6
3 issues framed by the court
Whether exemption from Additional Sales Tax for period April 1, 1996 to July 31, 1996 can be claimed based on revised threshold applicable from August 1, 1996.
Whether amended threshold provisions allowing higher turnover apply retroactively to the preceding period.
Whether assessing authority is bound to apply tax provisions effective from the date of insertion rather than total annual turnover.
Colour shows how this judgement treated each authority
Siemens Ltd. V. State of Tamil NaduReferred¶5
Siemens Ltd. V. State of Tamil Nadu (110 STC 313)
Philips India Limited V. Assistant Commissioner (CT), Fast Tract Assessment Circle II and othersDistinguished¶6
Philips India Limited V. Assistant Commissioner (CT), Fast Tract Assessment Circle II and others (137 STC 134)
State of Tamil Nadu V. National Time Co.Relied on¶8
State of Tamil Nadu V. National Time Co. (39 VST 247)
3 provisions across 2 enactments
Indian Rayon & Industries Limited
The Commercial Tax Officer, Mylapore Assessment Circle
The Sales Tax Appellate Tribunal (Main Bench)
DR. ANITA SUMANTH
MR. G.ARUL MURUGAN
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
