Madras High Court
M/S.Nadi Airtechnics P Ltd vs The State Tax Officer on 22 November, 2023
Author: R. Mahadevan
Bench: R. Mahadevan, Mohammed Shaffiq
W.P.No.537 of 2018
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED 22.11.2023
CORAM
THE HON'BLE Mr. JUSTICE R. MAHADEVAN
AND
THE HON'BLE Mr. JUSTICE MOHAMMED SHAFFIQ
W.P.No.537 of 2018
AND
W.M.P.No.648 of 2018
M/s.Nadi Airtechnics P Ltd.
Rep. by its Chief Financial Officer
No.34, GNT Road, Ponnianmedu
Madhavaram
Chennai 600 060 .. Petitioner
Vs.
The State Tax Officer
Madhavaram Assessment Circle
Madhavaram
Chennai .. Respondent
Writ Petition filed under Article 226 of the Constitution of India to issue a
writ of certiorari calling for the records of the respondent in his proceedings in
TIN/33811082263/2014-15, quash the notice dated 08.12.2017 issued therein
insofar as it relates to the proposal to reverse the Input Tax Credit under Section
19(2)(v) of the Tamil Nadu Value Added Tax, 2006.
For Petitioner : Mr.R.L.Ramani
Senior Advocate
For Respondent : Mr.Prashanth Kiran
Government Advocate
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1/6
W.P.No.537 of 2018
ORDER
(Order of the court was made by R. MAHADEVAN, J.)
This writ petition has been filed challenging the notice in
TIN/33811082263/2014-15 dated 08.12.2017 passed by the respondent.
2.It is the case of the petitioner that they are manufacturing industrial
exhaust fans and electrical fans, for which, they used to purchase raw materials
from registered dealers within the State on payment of tax and such tax suffered
inputs are used by the petitioner in the manufacture of the final product, ie.,
Industrial Exhaust Fans and Electrical Fans. The said goods were sold within
the State and also to dealers in other States. The inter-state sales, when
supported by 'C' declaration forms would come under Section 8(1) of the CST
Act and attract tax @ 2% and the sales which are not supported by 'C'
declaration forms would come under 8(2) of the CST Act and the rate of tax is
the rate applicable under the local Act. Due to the amendment made to Section
19(2) of the TNVAT Act, when goods are purchased locally from registered
dealers within the State on payment of TNVAT and sold on inter-state basis
supported by 'C' declaration forms, then Input Tax Credit in excess of 3% shall
be allowed to such dealer. While so, the respondent issued the impugned notice
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dated 08.12.2017 for the assessment year 2014-15, calling upon the petitioner
to pay the Input Tax Credit reversal amount. Challenging the notice, the
petitioner is before this Court.
3.The grounds raised in the writ petition are that the respondent has
ignored the fact that Section 19(2) of the TNVAT Act will apply only in cases
falling under Section 19(2) of the TNVAT Act and therefore, the said proviso
will apply only when local tax suffered goods are purchased for the purpose of
sale under Section 8(1) of the CST Act and that when Section 19(2) of the
TNVAT Act restricts availing of Input Tax Credit in cases falling under sub-
clause (v) to Section 19(2) of the TNVAT Act, the respondent's act of extending
the application of the proviso to other sub-clauses of Section 19(2) of the
TNVAT Act is absolutely unsustainable.
4.The learned counsel appearing for the petitioner submitted that the
issue involved herein is covered by the judgment of this Court in The State of
Tamil Nadu and Others Vs. Everest Industries Limited reported in
MANU/TN/2953/2022.
5.On the other hand, the learned Government Advocate appearing for the
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respondent has submitted that the Hon'ble Supreme Court has granted stay in
the SLP preferred by them against the judgment referred supra and accordingly
placed a copy of the stay order dated 25.07.2023 before us. Therefore, the
learned counsel sought liberty to the respondent to decide the issue afresh on
the basis of the final verdict to be rendered by the Apex Court.
6.This court has considered the submissions made by the learned counsel
on either side and also perused the records.
7.The impugned notice was issued in the year 2017 and the writ petition
was filed in the year 2018. After admission, only now the matter is listed before
us. Taking note of the facts and circumstances of the case, the petitioner is given
liberty to file reply to the impugned show cause notice mentioning the present
position of law, within a period of four weeks from the date of receipt of a copy
of this order. On receipt of such reply from the petitioner, the matter shall be
decided afresh on the basis of the final verdict to be rendered by the Apex
Court.
8.The writ petition is disposed of accordingly. No costs. Consequently,
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connected miscellaneous petition is closed.
[R.M.D,J.] [M.S.Q, J.]
22.11.2023
Neutral Citation : Yes/No
gya
To
The State Tax Officer
Madhavaram Assessment Circle
Madhavaram
Chennai
https://www.mhc.tn.gov.in/judis
R. MAHADEVAN, J.
AND
MOHAMMED SHAFFIQ, J.
gya
22.11.2023
https://www.mhc.tn.gov.in/judis
