Allowed¶32

Tvl. S.v.Sivalinga Nadar &Sons v. the State of Tamil Nadu

Madras HC4 Feb 2025WP/9604/2014

Case brief

AI extract

What is this about?

Keywords: W.P. No. 9604 of 2014; Madras High Court; decision dated 04.02.2025; Tamil Nadu Value Added Tax Act 2006; proviso to Section 19(2)(v) / sub-section (2) of Section 19; denial of Input Tax Credit; order of assessment; ultra vires challenge citing Articles 226, 301, 304, 246, 14, 19(1)(g); prior decision relied upon/applied: The State of Tamil Nadu and Another V. Everest Industries Limited, (2022) 103 GSTR 10; State's SLP; Supreme Court stay of refund dated 25.07.2023; writ petition allowed, no costs; petitioner counsel deceased, no appearance; bench: Dr. Justice Anita Sumanth and Justice C. Kumarappan.

What did the court decide?

Writ petition allowed, with no costs, on the basis that the unstayed ratio of the Everest Industries decision (2022) 103 GSTR 10 applies in favour of the assessee. ¶32

Tvl. S.v.Sivalinga Nadar &Sons Vs the State of Tamil… — Writ and Judicial Review | Madras HC (2025)

What the court decided

AI extract

Outcome

Writ petition allowed, with no costs, on the basis that the unstayed ratio of the Everest Industries decision (2022) 103 GSTR 10 applies in favour of the assessee.

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Issue for consideration

Whether the proviso to sub-section (2) of Section 19 of the Tamil Nadu Value Added Tax Act, 2006 is ultra vires the Constitution — contravening Article 301 read with Article 304, encroaching on the sphere of the Union Legislature (Article 246), and arbitrarily infringing rights under Article 14 and 19(1)(g) (prayer of the writ petition). +1 more

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Ratio / Principle

This Court records that the issue raised in the writ petition — denial of Input Tax Credit invoking the proviso to Section 19(2)(v) of the Tamil Nadu Value Added Tax Act, 2006 — has already been decided in favour of the assessee by this Court in The State of Tamil Nadu and Another V. Everest Industries Limited, (2022) 103 GSTR 10.

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Key takeaways

Since the Supreme Court stay of 25.07.2023 operates only on the refund pursuant to the impugned order of this Court and the Everest Industries decision itself has not been stayed, the ratio of that decision applies in favour of the assessee.ratio¶31

Detailed headnote1 paragraphs

Madras High Court (Dr. Justice Anita Sumanth — authoring judge — with Mr. Justice C. Kumarappan), W.P. No. 9604 of 2014, decided 04.02.2025. Petitioner Tvl.S.V. Sivalinga Nadar & Sons challenged an order of assessment denying Input Tax Credit under the proviso to Section 19(2)(v) of the Tamil Nadu Value Added Tax Act, 2006 (petition framed under Article 226 alleging ultra vires character vis-a-vis Articles 301, 304, 246, 14 and 19(1)(g)); petitioner's counsel on record was deceased and there was no appearance. The Court observed that the identical issue had been decided in favour of the assessee by its own decision in The State of Tamil Nadu and Another V. Everest Industries Limited, (2022) 103 GSTR 10; although the State had preferred an SLP and the Supreme Court (order dated 25.07.2023) had stayed the refund pursuant to the impugned Madras HC order until further orders, that earlier decision itself remained unstayed, so its ratio was applied in favour of the assessee and the writ petition was allowed with no costs.

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W.P. NO. 9604 of 2014

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IN THE HIGH COURT OF JUDICATURE AT MADRAS

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DATED: 04.02.2025

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CORAM

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THE HON’BLE DR. JUSTICE ANITA SUMANTH

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AND

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THE HON’BLE MR. JUSTICE C. KUMARAPPAN

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W.P. No. 9604 of 2014

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Tvl.S.V. Sivalinga Nadar & Sons, rep. by its Managing Partner, Thiru S. Velkumar, P.B. No. 75(444)/866, PJN Road, Villupuram – 605 602.

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..Petitioner

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Vs.

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The State of Tamil Nadu, rep. by the Secretary to Government, Commercial Taxes Department, Fort St. George, Chennai – 600 009.

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Union of India rep. through the Secretary to the Government of India, Ministry of Law and Justice, Legislative Department, 4^th Floor, A-Wing, Shastri Bhawan, New Delhi – 110 001.

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The Assistant Commissioner(CT), Villupuram – II Assessment Circle,

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

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27/11, VOC Street, Villupuram – 605 602.

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W.P. NO. 9604 of 2014

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..Respondents

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Prayer: Petition under Article 226 of the Constitution of India praying for issue of a Writ of Declaration declaring that the proviso to sub-section (2) of Section 19 of Tamil Nadu Value Added Tax Act, 2006 is ultra vires the Constitution as it contravenes the provisions of Article 301 read with Article 304 of the Constitution and is an encroachment on the sphere of the Union Legislature thereby violating Article 246 of the Constitution of India and arbitrarily and irrationally infringes the rights of the petitioner under Article 14 and 19(1)(g) of the Constitution of India.

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For Petitioner :: No appearance For Respondents :: Mr.V. Prashanth Kiran Govt. Advocate (Taxes) O R D E R

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( Made by Dr. ANITA SUMANTH,J.)

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It is brought to the notice of this Court that the learned counsel on record for the petitioner is no more.

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In any event, the challenge in this writ petition is to the order of assessment denying Input Tax Credit invoking proviso to Section 19(2)(v) of Tamil Nadu Value Added Tax Act, 2006.

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The said issue has been held in favour of the assessee by a decision of this Court in The State of Tamil Nadu and Another V. Everest Industries Limited ( (2022) 103 GSTR 10). As against the said judgment,

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2\4

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

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W.P. NO. 9604 of 2014

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the State has preferred an SLP and by order dated 25.07.2023, the Supreme Court has granted stay of refund pursuant to the impugned order of this Court until further orders.

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Since the decision of this Court has not been stayed, the ratio of

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the aforesaid decision will be applicable in favour of the assessee.

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In view of the above, the writ petition stands allowed. No costs.

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(A.S.M.J.) (C.K.J.)

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Index: Yes/No 04.02.2025 Neutral Citation: Yes/No Speaking Order/Non Speaking order

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The Secretary to Government, Commercial Taxes Department, Fort St. George, Chennai – 600 009.

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The Secretary to the Government of India, Ministry of Law and Justice, Legislative Department, 4^th Floor, A-Wing, Shastri Bhawan, New Delhi – 110 001.

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