Madras High Court
M/S.S.C.Shah And Company Private ... vs The State Tax Officer on 28 April, 2023
W.A.Nos.1002, 1003 & 1004 of 2023
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED 28.04.2023
CORAM
THE HONOURABLE Mr. JUSTICE R.MAHADEVAN
AND
THE HONOURABLE Mr. JUSTICE MOHAMMED SHAFFIQ
W.A.Nos.1002, 1003 & 1004 of 2023
and C.M.P.Nos.10052, 10053, 10055, 10057, 10058, 10059, 10061, 10062,
10063, 10065 & 10068 of 2023
M/s.S.C.Shah and Company Private Limited
represented by its Director Bavesh V Shah
F.No.3A, “Heavitree Building, 3rd Floor
No.47, Spurtank Road, Chetpet
Chennai – 600 031 .. Appellant
in all appeals
Vs.
1.The State Tax Officer
T.Nagar Assessment Circle
No.46, Greenways Road
Chennai – 600 028
2.The Assistant Commissioner (ST)
T.Nagar Assessment Circle
No.46, Greenways Road
Chennai – 600 028
3.The Branch Manager
Axis Bank, Triplicane Branch
Chennai – 600 005 .. Respondents
in all appeals
https://www.mhc.tn.gov.in/judis
W.A.Nos.1002, 1003 & 1004 of 2023
Common Prayer: Writ Appeals filed under Clause 15 of the Letters Patent
against the common order dated 17.04.2023 passed in W.M.P.Nos.11197,
11202 & 11209 of 2023 in W.P.Nos.11314, 11317 & 11321 of 2023 on the
file of this Court.
For Appellant
in all appeals : Mr.P.Rajkumar
For Respondents
in all appeals : Mr.M.Venkateshwaran
Special Government Pleader
COMMON JUDGMENT
[Judgment of the Court was delivered by R.MAHADEVAN, J.]
Mr.M.Venkateshwaran, learned Special Government Pleader, takes
notice for the respondents.
2.Heard both sides and also perused the materials placed before this
court.
3.Challenging the common order dated 17.04.2023 passed by the
learned Judge in W.M.P.Nos.11197, 11202 & 11209 of 2023 in
W.P.Nos.11314, 11317 & 11321 of 2023, the appellants have preferred the
present appeals.
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W.A.Nos.1002, 1003 & 1004 of 2023
4.According to the appellant, they are a dealer in consumer durable
goods such as TV, Washing machine, Refrigerator, home theatre systems,
etc. and was a registered dealer on the file of the first respondent herein. In
respect of the assessment years 2006-07, 2007-08 and 2008-09, notices
dated 22.12.2009 and 29.12.2009 were issued by the first respondent,
inter alia proposing to reverse the input tax, by stating that in view of the
incentives / discounts received by the appellant from its vendors, their
selling price was below their purchase price and therefore, they are not
entitled to the excess input tax credit available due to the lesser selling price
of the appellant. Upon receipt of the same, the appellant filed its objections
on 13.10.2010. Without appreciating the same, the first respondent passed
the assessment orders dated 29.10.2010 for the assessment years in
question, confirming the said proposal of reversing the input tax credit on
the incentives received by the appellant from its vendors on purchases.
Challenging the same, the appellant preferred WP.Nos.28335 to 28337 of
2010, which by order dated 04.02.2021, were disposed of, by setting aside
the reversal of ITC on the incentives / discounts received from its vendors,
following the decision of the Hon'ble Supreme Court in M/s.Jayam & Co.
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W.A.Nos.1002, 1003 & 1004 of 2023
v. Assistant Commissioner (CT) Main Amindakarai Assessment Circle,
Chennai and others [96 VST 1], and remanding the matter to the first
respondent for fresh consideration in respect of other issues. Pursuant to the
said order dated 04.02.2021, the first respondent, after following due
process of law, passed the fresh assessment orders dated 18.04.2022,
relating to the assessment years in question, ignoring the replies and
objections filed by the appellant, that too, beyond the time limit granted by
this court. Aggrieved by the same, the appellant filed WP.Nos.11314, 11321
and 11317 of 2023. On 17.04.2023, the learned Judge having observed that
the appellant has got prima facie case, has granted an order of interim stay,
on condition that they should pay a sum of Rs.75,00,000/- within a period of
four weeks from the date of the receipt of the order. Aggrieved by the same,
the appellant is before this court with the present appeals.
5.The learned counsel for the appellant submitted that out of the total
disputed tax of Rs.1,02,05,505/- for the assessment years in question, a sum
of Rs.46,81,461/- relates to the reversal of ITC on incentives, which is
covered by the judgment of the Apex Court in M/s.Jayaram & Co. case
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W.A.Nos.1002, 1003 & 1004 of 2023
(cited supra) and the order of this court dated 04.02.2021 in WP.Nos.28335
to 28337 of 2010 in the earlier round of litigation, wherein, the assessment
orders dated 29.10.2010, with respect to reversal of input tax on incentives /
discounts received by the appellant from its vendors, were set aside. After
deducting the said sum of Rs.46,81,461/-, the balance sum of Rs.55,24,044/-
pertaining to other issues, to which, the appellant has also filed application
under Section 84 of the TNVAT Act, 2006. As regards the penalty amount of
Rs.1,17,09,593/-, the same was made for the first time, in the assessment
orders dated 18.04.2022, which were impugned in the writ proceedings,
without there being a proposal in the notices issued and hence, the said levy
was clearly contrary to the principles of natural justice. While so, the
learned Judge, after recording the submissions made by the appellant and
having observed that the appellant has got prima facie case, imposed a
condition of payment of Rs.75,00,000/- for grant of interim stay, by the
order impugned herein, which is an onerous and harsh condition and the
same cannot be complied with by the appellant, in the present
circumstances. It is also submitted that without considering the application
filed by the appellant under section 84 of the TNVAT Act, 2006, the first
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W.A.Nos.1002, 1003 & 1004 of 2023
respondent has chosen to attach the bank account of the appellant with the
third respondent bank. Stating so, the learned counsel sought indulgence of
this court against the order impugned herein.
6.Considering the facts and circumstances of the case coupled with
the submissions made by the learned counsel for the appellant, more
particularly that the total quantum covered under Section 19(20) of the
Tamil Nadu Value Added Tax Act, 2006, amounts to Rs.46,81,461/-, which
was set aside in the earlier round of litigation vide order dated 04.02.2021 in
W.P.Nos.28335 to 28337 of 2010, but, the same was not taken into
consideration by the learned Judge and that, if the amount so deleted, is
deducted from the total disputed tax of Rs.1,02,05,505/- by way of
subsequent assessment proceedings, the total outstanding amount would be
around Rs.55,00,000/-, this court, to meet the ends of justice, is inclined to
modify the order of the learned Judge, in the following terms:
i. The appellant shall pay a sum of Rs.25,00,000/- within a period of
eight weeks from the date of receipt of a copy of the judgment;
ii. On such payment, bank attachment, if any, shall be lifted forthwith;
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W.A.Nos.1002, 1003 & 1004 of 2023
iii. On the failure of the appellant to comply with the direction (i) above,
the interim order granted by the learned Judge shall stand vacated
automatically without any reference to this court.
7.All these writ appeals stand disposed of, with the above terms. No
costs. Connected C.M.Ps. are closed.
[R.M.D., J.] [M.S.Q., J.]
28.04.2023
Index: Yes / No
Speaking order/ Non-speaking order
Neutral Citation: Yes / No
nsd
To
1.The State Tax Officer
T.Nagar Assessment Circle
No.46, Greenways Road
Chennai – 600 028
2.The Assistant Commissioner (ST)
T.Nagar Assessment Circle
No.46, Greenways Road
Chennai – 600 028
https://www.mhc.tn.gov.in/judis
W.A.Nos.1002, 1003 & 1004 of 2023
R.MAHADEVAN, J.
AND
MOHAMMED SHAFFIQ, J.
nsd
W.A.Nos.1002, 1003 & 1004 of 2023
28.04.2023
https://www.mhc.tn.gov.in/judis
