Madras High Court
M/S.Agathiyan Traders vs 3 The Branch Manager on 5 August, 2021
W.P. No.7080 of 2020
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 05.08.2021
CORAM
THE HONOURABLE DR. JUSTICE ANITA SUMANTH
W.P. No.7080 of 2020 and
WMP.No.8434 of 2020
M/s.Agathiyan Traders,
Represented by its Proprietrix S.Vidhya
No.2 Varadharajan Pillai Nagar
Nellikuppam Main Road Semmandalam
Cuddalore -607 001. ...Petitioner
Vs.
1 The Appellate Deputy Commissioner (CT)
Cuddalore Commercial Taxes Building
Sub-Jail Road Cuddalore.
2 The Assistant Commissioner (CT) (FAC)
Cuddalore Town Assessment Circle
Cuddalore.
3 The Branch Manager
Karur Vysya Bank
Car Street Cuddalore - 607 002. ...Respondents
1
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W.P. No.7080 of 2020
Prayer: Writ Petition filed under Article 226 of the Constitution of India praying to
issue Writ of certiorari, calling for the records of the first respondent in his
proceedings in A.P.No. 230/2018 VAT quash the order dated 23.10.2019 made
therein and further direct the first respondent to consider and pass orders in the
Rectification Application dated 9.3.2020 in the light of the judgment of this Honble
Court dated 20.12.2018 made in W.P.No.(MD) No. 3744 of 2015.
For Petitioner : Mr.P.Rajkumar
For Respondents : Mr.TNC.Kaushik,
Government Advocate – R1 & R2
No appearance - R3
********
ORDER
The challenge in this Writ Petition is to an order passed by the first appellate
authority confirming the order of assessment passed under the provisions of the
Tamil Nadu Value Added Tax Act, 2006 (in short 'Act') for the period 2007-08.
2. The only issue that arises is as to whether the petitioner is entitled to
concessional rate of tax at 0.5% for the turnover earned. I have, in a batch of
matters, W.P.Nos.9996 of 2012 and batch, dated 03.10.2019, held that the
amendment to Section 3(4), inserted vide Amendment Act 2011, should be taken to
be retrospective. At paragraph Nos.36 to 38, I have held as follows:
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W.P. No.7080 of 2020
' ............
36. A reading of both makes it abundantly clear that there were doubts on the actual
interpretation and application of the 2008 amendment which is why clarity was
brought in by way of the 2011 amendment to provide that liability to tax would attach
itself to a dealer only in respect of such turnover in excess of Rs.50 lakhs. The
application of the amended provision in 2011 would apply for all assessments from
2006 onwards since it was brought in clearly to correct the lacune contained in the
2006 amendment, being unclear.
37. The Statement of Objects and Reasons in respect of the 2011 amendment makes
this position furthermore clear, stating as follows:
STATEMENT OF OBJECTS & REASONS
‘As per clause (b) of sub-section (4) of Section 3 of the Tamil Nadu value
added Tax Act, 2006 (Tamil Nadu Act 32 of 2006) if the turnover relating to
taxable goods of a dealer who has exercised his option to pay tax under
clause (a) of the said subsection (4) in a year, reaches rupees fifty lakhs at
any time during that year such dealer is liable to pay tax under sub-section
(20 of said section 3 on all his sales of rupes fifty lakhs and above. Due to this
provision, while the dealer does not collect tax on turnover relating to taxable
goods below rupees fifty lakhs, he is required to pay the tax.
2. While moving the demand for grant in respect of the Commercial Taxes
Department for the year 2011-12, the Hon'ble Minister for Commercial Taxes
and Registration has announced that amendment to sub-section (4) of
section 3 of the said act will be made to rectify the above situation, so that if
the turnover relating to taxable goods of a dealer paying tax under clause (a),
in a year, reaches rupees fifty lakhs at any time during that year, such dealer
is liable to pay tax under subsection (2) of that section on all his sales of
taxable goods above rupees fifty lakhs.
3. The Government have decided to amend the Tamil Nadu Value Added Tax
Act, 2006 (Tamil Nadu Act 32 of 2006) suitable for the purpose.
4. The Bill seeks to give effect to the above decision.
(highlighting supplied for emphasis)
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W.P. No.7080 of 2020
38. The use of the word ‘rectify’ and the analysis of the reasons for insertion of this
amendment in the first paragraph wherein it is captured that a higher rate of tax
would be payable by a dealer even in respect of turnover where he has not collected
taxes leaves me in no doubt that the amendment was inserted only to correct an
unintended anomaly that arose in the operation of the law, by virtue of the
amendment inserted in 2006.
........
3. This decision has not been challenged till date and though the learned
Government Advocate would state that a Writ Appeal has been filed, it is still in SR
stage. Hence, I reiterate the view taken by me in the above matter, quash the
impugned order and allow this Writ Petition.
4. With the quashing of the impugned assessment order, coercive recovery
proceedings, by way of attachment of bank account of the petitioner, would also go.
There is hence, a direction to R3 to lift the attachment of the bank account of the
petitioner in Karur Vysya Bank, Cuddalore, forthwith. No costs. Connected
Miscellaneous Petition is closed.
05.08.2021
Sl
Index: Yes
Speaking order
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W.P. No.7080 of 2020
To
1 The Appellate Deputy Commissioner (CT)
Cuddalore Commercial Taxes Building
Sub-Jail Road Cuddalore.
2 The Assistant Commissioner (CT) (FAC)
Cuddalore Town Assessment Circle
Cuddalore.
3 The Branch Manager
KarurVysya Bank
Car Street Cuddalore - 607 002.
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W.P. No.7080 of 2020
DR. ANITA SUMANTH, J.
sl
W.P. No.7080 of 2020 and
WMP.No.8434 of 2020
05.08.2021
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