Madras High Court

M/S.First Technologies (India) vs The Appellate Assistant ... on 4 January, 2021

                                                                                   TCR.No.11 of 2019


                                       IN THE HIGH COURT OF JUDICATURE AT MADRAS

                                                     DATED : 04.1.2021

                                                          CORAM

                                       THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAM

                                                            and

                                         THE HONOURABLE MS.JUSTICE R.N.MANJULA

                                              Tax Case Revision No.11 of 2019

                     M/s.First Technologies (India)
                     Pvt. Ltd., Puducherry-9                                       ...Petitioner
                                                            Vs

                     The Appellate Assistant Commissioner
                     (CT), Commercial Taxes Department,
                     Puducherry.                                                   ...Respondent

REVISION under Section 51 of the Puducherry Value Added Tax

Act, 2007 against the order dated 31.8.2018 passed by the Puducherry

Value Added Tax Appellate Tribunal, Puducherry in T.A.No.13 of 2017

for the assessment year 2009-10.

                                             For Petitioner :    Mr.P.V.Sudhakar
                                             For Respondent :    Ms.N.Mala, SGP

Order of the Court was made by T.S.SIVAGNANAM,J

This revision has been filed by the petitioner – dealer under

Section 51 of the Puducherry Value Added Tax Act, 2007 ('the Act' for

brevity) challenging the order dated 31.8.2018 made in T.A.No.13 of

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2017 on the file of the Puducherry Value Added Tax Appellate Tribunal,

Puducherry ('the Tribunal' for brevity) for the assessment year 2009-

2. The petitioner has filed this revision by raising the following

substantial questions of law:

“1. Whether the Appellate Tribunal is right in its conclusion that the assessment order dated 05.12.2016 passed for the assessment year 2009-10 is within the period of limitation stipulated under Section 24(6) of the Puducherry Value Added Tax Act ?

2. Whether the order passed by the Appellate Tribunal is right in the light of the judgment of the Hon'ble Supreme Court dated 12.10.2018 in the case of TVS Motor Company Ltd. Vs. State of Tamil Nadu and others in Civil Appeal Nos.10560 to 10564 of 2018 ? and

3. Whether the order passed by the Appellate Tribunal affirming the reversal of input tax credit on the inter-state sales effected to Government Departments is sustainable in the light of the law laid down by the Hon'ble Supreme Court in Civil Appeal Nos.

10560 to 10564 of 2018 holding that a dealer effecting inter-state sales to Government Departments is entitled to the benefits of input

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tax credit and the Government Departments are deemed to be registered dealers ?”

3. We have heard Mr.P.V.Sudhakar, learned counsel appearing for

the petitioner – dealer and Ms.N.Mala, learned Special Government

Pleader appearing for the respondent – Department.

4. The petitioner is a registered dealer on the file of the

respondent Department and they are engaged in the manufacture of

zipper and zipper components.

5. The issue, which falls for consideration in this revision, is as to

whether the dealer is entitled to concessional rate of tax in respect of

inter-state sales effected by them to the Defence Department.

6. The Assessing Officer, the Appellate Assistant Commissioner

and the Tribunal decided against the dealer on the ground that the

dealer did not file Form-C Declarations and therefore, directed the

reversal of input tax credit availed by the dealer. The decision of the

Assessing Officer, the First Appellate Authority and the Tribunal cannot

be faulted because on and after 01.4.2007, the procedure of issuing

Form-C Declarations in respect of the transactions done by third party

dealers with the Defence and the Government Departments was

dispensed with. The consequence, which followed out of it was that the

Government Departments and the Defence Departments were deemed

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to be treated as unregistered dealers and a higher rate of tax was

levied on such inter-state transactions.

7. However, the position after October 2018 is different in the

light of the decision of the Hon'ble Supreme Court in the case of TVS

Motor Company Ltd. Vs. State of Tamil Nadu [reported in 70

GST 501] wherein it was held that if a dealer makes sales to other

State Government Departments, the benefit of input tax credit should

be allowed without insisting upon furnishing of Form-C Declarations

and in order to avail this benefit, a certificate from the said State

Government Department, to whom the supplies were effected, should

be obtained by the dealer and submitted to the Assessing Officer.

8. The learned counsel appearing for the petitioner has referred

to paragraph 47 of the said judgment, which reads as hereunder :

“Thus, wherever the State Government buys, sells, supplies or distributes goods, it shall be deemed to be the dealer for the purposes of TNVAT Act. At the same time, TNVAT Act does not require registration by the State Government inasmuch as Section 38 which deals with registration of dealers explicitly provides, under Sub-Section (8) thereof, that this provision shall not apply to any State Government or Central Government.

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A conjoint reading of the aforesaid two provisions would show that when a sale is made to the State of Karnataka, it is made to a dealer but that dealer is under no obligation to get itself registered under the TNVAT Act.

Because of this exemption, no State Government does that and since it is not a registered dealer, it would not be in a position to issue any Form C. But for that, the genuineness of sales made to a State Government cannot be doubted. This situation puts those dealers who are making sales to the State Government in disadvantageous position, even when it is clear that there is no possibility of tax evasion as there cannot be any such apprehension in case of sales to the State Government. We may point out here that benefit of ITC is given whenever sale is made to a dealer outside State of Tamil Nadu and the said dealer is a registered dealer.”

9. Though such a legal contention has been raised before us, we

find that it was not raised before the Assessing Officer or before the

First Appellate Authority or before the Tribunal. Therefore, we cannot

test the correctness of the orders passed by the Lower Authorities and

that of the Tribunal by referring to a decision, which was rendered

after the impugned order was passed. That apart, to apply the decision

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of the Hon'ble Supreme Court, the factual position has also to be taken

note of, which cannot be done by us while exercising our revisional

jurisdiction under Section 51 of the Act.

10. Thus, taking note of the submissions of the learned counsel

for the petitioner – dealer and taking note of the said decision of the