Dismissed

Tvl.Amco Batteries Ltd. v. Chairman

Madras HC4 Oct 2024WP/18119/2008

Case brief

AI extract

What is this about?

The High Court dismissed the writ petition by the petitioner challenging the rejection of a second sales exemption claim. It held that the petitioner failed to furnish evidence of tax payment on the initial sale and dismissed the argument that partial exemption validated the remainder, as the partial claim attained finality during assessment.

What did the court decide?

The writ petition calling for records and praying to quash the order was dismissed; no costs awarded.

Tvl.Amco Batteries Ltd. Vs Chairman — Writ and Judicial Review | Madras HC (2024)

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2024:MHC:3560

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W.P.No.18119 of 2008

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IN THE HIGH COURT OF JUDICATURE AT MADRAS

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DATED: 04.10.2024

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CORAM :

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THE HONOURABLE DR.JUSTICE ANITA SUMANTH and THE HONOURABLE MR.JUSTICE G. ARUL MURUGAN

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W.P.No.18119 of 2008 & MP.No.2 of 2008

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Tvl.Amco Batteries Ltd. No.7, P.S.Sivasamy Road, Chennai – 2.

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... Petitioner

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1.Chairman – TamilNadu Sales Tax Appellate Tribunal (MB) Chennai – 104

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2.The Appellate Assistant Commissioner CT (IV) Chennai – 108.

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3.Commercial Tax Officer, Mylapore Asst. Circle, Chennai. .. Respondents

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Prayer: Petition filed under Article 226 of the Constitution of India praying to issue a writ of Certiorarified Mandamus to call for the records of the first respondent in T.A.No.570/2002 dated 02.05.06 and quash the same as illegal, unlawful and unconstitutional and direct the third respondent to pass fresh orders after verifying the evidence relating to second sales of batteries.

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For Petitioner : Mr.R.Ganesh Kanna

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https://www.mhc.tn.gov.in/judis

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W.P.No.18119 of 2008

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For Respondents: Mr.TNC.Kaushik (for R2 and R3) Additional Government Pleader R1 - Tribunal

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ORDER

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(Order of the Court was made by Dr.ANITA SUMANTH.,J) The petitioner is a dealer in batteries and is assessed under the

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provisions of the Tamil Nadu General Sales Tax Act, 1959 (in short 'Act').

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2.An assessment was made on 20.03.2000 for the period 1998-99. The petitioner had claimed exemption on second sales of an amount of Rs.3.93 crores (Approx.). A notice was issued by the assessing authority calling for corresponding materials to establish the claim of second sales.

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He proposed under the notice that since corresponding and supporting materials had not been filed, the claim of second sales would be rejected and the turnover brought to tax at the rate of 20%.

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3.Objections were called for. Vide reply dated 09.02.2000, the petitioner accedes to the position that the turnover, on the basis of which the claim of second sales had been made, had been received from its own plant at Hebbal, Bangalore.

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4.According to the petitioner, having received the batteries from its plant at Bangalore, the sales by the plant in Chennai would constitute second sales.

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https://www.mhc.tn.gov.in/judis

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W.P.No.18119 of 2008

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5.We are not persuaded to accept the argument that such sales could be construed as second sales at all. Per the explanation tendered in the reply to notice, the transaction could well have been in the nature of a branch transfer. This is all the more for the reason that the petitioner has not produced an iota of information or any supporting documents to establish that the purchases have been made from a registered dealer, in whose hands the turnover has suffered tax.

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Their reply dated 09.02.2000, does not anywhere state that the turnover from the sale of the batteries has suffered tax in the hands of the unit at Hebbal, Bangalore, and in any event, no evidences have been referred to therein in support of the claim of second sales. The operative portion of the reply reads thus:

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'The details of 2^nd Sales to the tune of Rs.3,93,46,180/- is enclosed. The gross margin is only 30.18% without considering any overheads and warranty claims. However all Warranty claims and expenditures are considered there may not be any margin at all for the sales effected. To disallow the 2^nd sales turnover is not correct. Our 1^st sales are from batteries received from our Hebbal Plant at Bangalore where the cost of manufacturing, Freight and overheads are more compared to purchase price of batteries obtained from TAFE-PSD. Further, we are having a location advantage as the plant is located near Madras for which we should not be penalised. As per the TNGST Act the 2^nd sales is exempted and we are well within it. Under circumstances, we would request you to consider the above facts and drop taxing the 2^nd sales at 20% and the entire 2^nd sales be exempted from the Sales

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https://www.mhc.tn.gov.in/judis

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W.P.No.18119 of 2008

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Tax.'

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The petitioner has proceeded to instead, elaborate details in regard to the gross profit and profit margin which factors are irrelevant to decide the claim of second sales exemption, in the absence of primary evidences to support such claim.

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Section 10(2) of the Act which deals with burden of proof places the burden, in the case of any claim including a claim of second sales, on the entity person making such claim. Hence it is incumbent on the petitioner to furnish materials in support of the position that the turnover from the sales of batteries has suffered tax at the first stage and to establish the factum of sale thereafter to it. This would include proving the movement of the goods from the seller to the purchaser. None of these aspects have been looked into by the assessing officer who has granted second sales exemption to an extent of Rs.3.67 crores, merely restricting the quantum of the claim.

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8.The petitioner would seek to take advantage of this position stating that where the assessing officer has himself granted exemption to an extent of Rs.3.67 crores, there is no justification to deny exemption in respect of the balance turnover of Rs.25.54 lakhs alone. We reject this argument. Merely because an error has been committed by the assessing authority does not mean that the error must be perpetrated. Since the https://www.mhc.tn.gov.in/judis 4/6

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W.P.No.18119 of 2008

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claim of exemption in respect of the turnover of Rs.3.67 crores has attained a finality at the stage of assessment without having been revised by the Joint Commissioner, as could well have been done, we do not disturb the same. There is no infirmity in the findings and conclusions of the first and second appellate authorities, confirming the rejection of second sales exemption in regard to the turnover of Rs.25.54 lakhs.

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This writ petition is dismissed. No costs. Connected

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miscellaneous petition is closed.

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[A.S.M., J] [G.A.M., J] 04.10.2024

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Index:Yes/No Speaking order Neutral Citation:Yes vs To

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1.Chairman – TamilNadu Sales Tax Appellate Tribunal (MB) Chennai – 104

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2.The Appellate Assistant Commissioner CT (IV) Chennai – 108.

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3.Commercial Tax Officer, Mylapore Asst. Circle, Chennai.

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https://www.mhc.tn.gov.in/judis

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W.P.No.18119 of 2008

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DR. ANITA SUMANTH,J. and G. ARUL MURUGAN.,J

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W.P.No.18119 of 2008 & MP.No.2 of 2008

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04.10.2024

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https://www.mhc.tn.gov.in/judis

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Tvl.Amco Batteries Ltd. v. Chairman

Case brief

What is this about?

What did the court decide?

Tvl.Amco Batteries Ltd. v. Chairman

Case brief

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