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2012 Supreme(Mad) 3486
High Court of Judicature at Madras
M. JAICHANDREN, J.
Voltas Limited, Rep by its Manager Indirect Taxes, Chennai
Versus
The Deputy Commissioner (CT) – II, Chennai
W.P.No.1585 of 2012 & W.P.No.1586 of 2012
Decided On : 08-08-2012
For the Petitioner:N. Sriprakash, Advocate.
For the Respondent:A.R. Jayaprathap, Government Advocate (Taxes).
The petitioner was entitled to the deduction under Section 3(B)(2)(a) of the Tamil Nadu General Sales Tax Act, 1959, for tax paid on inter-state purchase of goods for executing works contracts.
Headnote:
Tamil Nadu General Sales Tax Act - Works Contracts - Section 3(B)(2)(a) - Summary: The court considered the petitioner's claim for refund of tax paid on inter-state purchase of goods for executing works contracts. The court held that the petitioner was entitled to the deduction under Section 3(B)(2)(a) of the Tamil Nadu General Sales Tax Act, 1959, and set aside the impugned order imposing a penalty, directing the refund of the amount of Rs.60,91,483/- to the petitioner.
Fact of the Case:
The petitioner, a registered dealer, claimed refund of tax paid on inter-state purchase of goods for executing works contracts. The Assessing Authority rejected the claim, but the First Appellate Authority accepted it. Subsequently, the respondent imposed a penalty and held that the amount had been forfeited by the petitioner.
Finding of the Court:
The court found that the impugned order was arbitrary and illegal, as the order of the First Appellate Authority had become final and the respondent had no authority to impose a penalty. The court directed the refund of the amount to the petitioner.
Issues: Refund of tax paid on inter-state purchase of goods, imposition of penalty under Section 22(2) of the Tamil Nadu General Sales Tax Act, 1959.
Ratio Decidendi: The impugned order was arbitrary and illegal, and the petitioner was entitled to the deduction under Section 3(B)(2)(a) of the Tamil Nadu General Sales Tax Act, 1959.
Final Decision: The court set aside the impugned order and directed the refund of the amount of Rs.60,91,483/- to the petitioner.
1. Since, the issues involved in both the writ petitions are similar in nature, they have been taken up together and a common order is passed.
2. Heard the learned counsels appearing for the parties concerned.
3. It has been stated that the petitioner is a dealer, registered under the provisions of the Tamil Nadu General Sales Tax Act, 1959, and the Central Sales Tax Act, 1956. During the assessment year 1993-94, the petitioner had effected works contracts, relating to central air conditioning plants, in the State of Tamil Nadu. In order to execute such works contracts, the petitioner had effected inter-state purchase of various goods and materials, from the vendors, who are located outside the State of Tamil Nadu. As such, the works contracts entered into, by the petitioner, had involved inter-state movement of goods. The petitioner had collected the appropriate tax from its customers and had filed the returns and paid the tax, under Section 3(B) of the Tamil Nadu General Sales Tax Act, 1959.
4. It has been further stated that the petitioner had taken the stand that the goods and materials sourced from the vendors, located outside the state of Tamil Nadu, and utilised in the execution of the works contracts inside the State of Tamil Nadu, could not be brought to tax, in view of the deduction available for such amounts, under Section 3 (B)(2)(a) of the Tamil Nadu General Sales Tax Act, 1959, in view of the decision of the Supreme Court, in BUILDERS ASSOCIATOIN OF INDIA Vs. UNION OF INDIA AND OTHERS (1973 STC 370). Accordingly, the refund of an amount of Rs.60,91,483/-, paid as tax, which included the tax, surcharge and additional surcharge, had been claimed by the petitioner. However, by an order of assessment, dated 13.3.2000, relating to the assessment year 1993-94, the Assessing Authority had rejected the claim of the petitioner.
5. It has been further stated that, aggrieved by such rejection, the petitioner had preferred a first appeal, in A.P.No.87 of 2000. By a final order, dated 4.4.2003, received by the petitioner, on 9.5.2003, the First Appellate Authority had accepted the claim of the petitioner and had held that the petitioner was entitled to the deduction, under Section 3(B)(2)(a) of the Tamil Nadu General Sales Tax Act, 1959.
6. It has been further stated that the First Appellate Authority had also directed the Assessing Authority to grant the necessary relief, as prayed for by the petitioner. Accordingly, a sum of Rs.60,91,483/-was liable to be refunded to the petitioner. Since, the order of the First Appellate Authority, dated 4.4.2003, had not been challenged, the said order had become final.
7. It has been further stated that, when the petitioner was entitled to the refund of Rs.60,91,483/-, the respondent had passed the impugned order, dated 28.12.2011, treating the sum of Rs.62,99,409/-, as excess collection of tax. Accordingly, he had imposed the penalty on the petitioner, under Section 22(2) of the Tamil Nadu General Sales Tax Act, 1959, and had held that the said amount had been forfeited by the petitioner.
8. It had been further stated that, out of the amount of Rs.62,99,409/-, a sum of Rs.60,91,483/- relates to the amount directed to be refunded by the First Appellate Authority, by its order, dated 4.4.2003, made in A.P.No.87 of 2000. In such circumstances, the petitioner had filed the above writ petitions to set aside the impugned order of the respondent, dated 28.12.2011, imposing the penalty of Rs.60,91,483/-, under Section 22(2) of the Tamil Nadu General Sales Tax Act, 1959, and for a further direction to refund the said amount to the petitioner.
9. In the common counter affidavit filed on behalf of the respondents, the averments made in the affidavit filed in support of the writ petitions had been denied.
10. It has been stated that the excess amounts of tax, amounting to Rs.60,91,483/-, collected by the petitioner, had been recovered, under Section 22(2) of the Tamil Nadu General Sales
