[Cites 12, Cited by 0]
Madras High Court
Voltas Limited vs The State Of Tamil Nadu on 20 February, 2026
Author: Anita Sumanth
Bench: Anita Sumanth
W.P.No. 33656 of 2005
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 20.02.2026
CORAM :
THE HONOURABLE DR.JUSTICE ANITA SUMANTH
and
THE HONOURABLE MR.JUSTICE MUMMINENI SUDHEER
KUMAR
W.P.No. 33656 of 2005
Voltas Limited
No.52- Armenian Street,
Chennai 600 001. .. Petitioner
vs
1.The State of Tamil Nadu,
Represented by the Secretary to Government,
Department of Commercial Taxes and Religious Endowments,
Fort St- George,
Chennai - 600 009-
2.The Assistant Commissioner (CT),
Fast Track Assessment Circle - II,
Chennai
.. Respondents
Prayer : This Petition came to be numbered by transfer of O.P.No.212 of
2003 from the file of the Tamil Nadu Taxation Special Tribunal, Chennai
under Section 7 of Act 42/92 of TNGST Act, 1959 after abolition of the
Tribunal in 2004 praying this Court to declare Explanation (v) to Section
2(1)(aa) of the Tamil Nadu Additional Sales Tax Act, 1970, inserted by
1/7
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W.P.No. 33656 of 2005
Tamil Nadu Additional Sales Tax (Amendment) Act, 2002 (Act
No.23/2002) as ultra vires Articles 14, 245, 246, 265, 269 and 286, Entry
92-A of List-I to the Seventh Schedule, Entry 54 of List-II to the Seventh
Schedule to the Constitution of India, 1950 and hence ab initio void.
For Petitioner : Mr.Parthasarathy
For Respondent : Mr.V.Prasanth Kiran
Government Advocate
ORDER
(Made by Dr. ANITA SUMANTH, J.)
The prayer in this writ petition is for a declaration challenging
explanation to Section 21(1)(aa) of the Tamil Nadu Additional Sales Tax
Act (Amendment) Act, 2002 (Act 23/2002).
2. Both Mr.Parthasarathy appearing for the petitioner and
Mr.Prasanth Kiran, learned Government Advocate, appearing for the
Department draw attention to an order passed in W.A.(MD) No. 174 of
2013 on 29.09.2016 that considered the identical issue and decided the
same in favour of the assessee. The operative portion reads as follows:-
13. In the case on hand, in the form of Explanation, in order to
get over the effect of the judgment in South India Corporation
Ltd. v. Commercial Tax Officer, Coimbatore and others reported
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in 124 STC 654, the scope of Charging Sections has been
expanded. The learned Single Judge has considered the scope of
Charging Sections, viz., amended Section 2(1)(aa) of the Act, and
by placing reliance on the judgment of the Honourable Supreme
Court in S.Sundaram v. V.R.Pattabhiraman reported in AIR
1985 SC 582 and also the opinion of the learned Authors, has
held that it is contrary to the provisions of the Act.
14. It is a settled position of law that the Explanation normally
should be read so as to harmonise with and clear up any
ambiguity in the main section and it should not be so construed
as to widen the ambit of the section and also to clarify the
doubtful point in law and to serve as a proviso to main section.
15. In S.Sundaram v. V.R.Pattabhiraman reported in AIR 1985
SC 582, the following objects of an Explanation to a statutory
provision have been culled out and it is relevant to extract the
same as under:
"(a) to explain the meaning and intendment of the Act itself;
(b) where there is any obscurity or vagueness in the main
enactment, to clarify the same so as to make it consistent with the
dominant object which it seems to subserve;
(c) to provide an additional support to the dominant object of the
Act in order to make it meaningful and purposeful;
(d) an Explanation cannot in any way interfere with or change
the enactment or any part thereof but where some gap is left
which is relevant for the purpose of the Explanation, in order to
suppress the mischief and advance the object of the Act it can
help or assist the Court in interpreting the true purport and
intendment of the enactment, and
(e) it cannot, however, take away a statutory right with which any
person under a statute has been clothed or set at naught the
working of an Act by becoming an hindrance in the
interpretation of the same."
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16. Section 7-C of the TNGST Act, is extracted hereunder:
"7-C. Payment of tax at compounded rates by works contractor.-
(1) Notwithstanding anything contained in Section 3-B, every
dealer referred to in item (vi) of clause (g) of Section 2, may, at
his option, instead of paying tax in accordance with Section 3-B,
pay, either on the total value of each works contract or on the
total value of all works contracts, executed by him in a year, tax
calculated at the following rate, namely:-
(i) Civil works contract. : Two per cent of the total contract value
of the civil works executed;"
17. The dealer need to pay tax based on his taxable turnover
determined after allowing various deductions admissible under
law and without amending the said provision, merely the
Explanation V is added to get over the effect of the judgment in
South India Corporation Ltd. v. Commercial Tax Officer,
Coimbatore and others reported in 124 STC 654.
18. In the light of the judgment of the Honourable Supreme Court
in S.Sundaram v. V.R.Pattabhiraman reported in AIR 1985 SC
582, this Court is of the considered view that the impugned
Explanation sought to widen the scope of taxable turnover as
defined under Section 2(p) of the TNGST Act and the learned
Judge in the impugned order has taken into consideration the
well settled position of law and held that the impugned
Explanation is contrary to the provisions of the Act and allowed
the writ petition.
19. In paragraph 19 of the judgment in South India Corporation
Ltd. v. Commercial Tax Officer, Coimbatore and others
reported in 124 STC 654, the Division Bench of this Court also
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held that the claim for additional sales tax by treating the
contract value as the taxable turnover is not permissible under
the provisions of either the TNGST Act or the Additional Sales
Tax Act. The said judgment has also reached finality as no
further challenge has been made and therefore, on that ground
also, the impugned Explanation is to be declared as ultra vires
and it was rightly declared so in the impugned order passed in
the writ petition.
20. This Court upon scrutiny and consideration of the relevant
materials and in the light of the above judgment is the considered
opinion that there is no error apparent or infirmity in the reasons
assigned in the impugned order in allowing the writ petition and
finds no merit in the writ appeal.
21. Therefore, this writ appeal is dismissed and the order passed
in W.P(MD)No.1831 of 2007, dated 27.09.2011, is confirmed. No
costs.”
3. In light of the aforesaid, this writ petition is allowed. No costs.
[A.S.M, J.] [M.S.K, J.]
20.02.2026
Index:Yes/No
Neutral Citation:Yes/No
ssm
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To
1.The Secretary to Government,
Department of Commercial Taxes and Religious Endowments,
Fort St- George,
Chennai - 600 009-
2.The Assistant Commissioner (CT),
Fast Track Assessment Circle - II,
Chennai
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DR. ANITA SUMANTH,J.
and
MUMMINENI SUDHEER KUMAR,J.
ssm
20.02.2026
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