Rajiv Shakdher, J.

1. This writ petition lays in effect a challenge to Sections 19(2)(ii) and 19(4) of the Tamil Nadu Value Added Tax Act, 2006 (in short 'the 2006 Act').

1.1. The challenge to the said Sections, is based on the assertion, made by the writ petitioner, that the said provisions of the 2006 Act, violate, Articles 14, 19(1)(g), 301 and 304(a) & (b) of the Constitution.

1.2. Accordingly, the writ petitioner, seeks a direction against the respondents to forbear from relying upon the impugned provisions to reverse or recover Input Tax Credit (in short, "ITC") under Section 27(2) of the 2006 Act.

1.3. In aid of its submissions, the writ petitioner has also asserted that denial of ITC, in respect of bullion and raw material, purchased within the State of Tamil Nadu, which is converted into finished jewellery, albeit, outside the State and sold, thereafter, within the State of Tamil Nadu, is unlawful and violative of the provisions of Article 265 of the Constitution.

2. Therefore, as would be obvious, the only issue, which arises for consideration, in the writ petition is : whether the writ petitioner, ought to be denied ITC, on bullion and raw material, purchased within the State of Tamil Nadu, which is sent outside the State for being converted into finished jewellery and thereafter, brought back into the State for sale ?

2.1. The writ petitioner asserts that such denial of ITC violates its right of free trade, commerce and intercourse, as conferred upon it under Article 301 of the Constitution.

3. Before one proceeds to examine the arguments put forth on both sides, it may be useful to briefly set out the broad facts of the case:

3.1. The writ petitioner is a registered dealer, whose business is to purchase bullion and worn-out jewellery convert the same into new jewellery for sale to its customers. Importantly, bullion and worn-out jewellery is bought by the writ petitioner from registered dealers located within the State of Tamil Nadu, against tax invoices and after remitting requisite tax, payable on the transaction.

3.2. The tax suffered bullion and worn-out jewellery, purchased by the writ petitioner is entrusted to manufacturers such as Malabar Gold Ornament Makers (P) Limited, located in Calicut, in the State of Kerala, as well as to local manufacturers situate within the State of Tamil Nadu.

3.3. The writ petitioner claims that the reason bullion and worn-out jewellery is sent outside the State, to a place such as, Calicut for manufacturing is, that while there is market for Kerala fashion jewellery within the State of Tamil Nadu, the artisans, with requisite skills are not available within the State of Tamil Nadu.

3.4. The writ petitioner's case is that upon payment of conversion charges, the final product, that is, jewellery, is returned to it for sale within the State of Tamil Nadu, once again, against tax invoices. The sale transaction within the State of Tamil Nadu is, thus, completed after paying the requisite tax, albeit, upon claiming set off qua tax paid on bullion and worn-out jewellery.

3.5. It appears that on 13.01.2010, a notice was issued by the first respondent, calling for details from the writ petitioner, inter alia, with regard to, bullion purchased, within the State, but sent for conversion outside the State and, thereafter, sold to customers within the State. The notice sought month-wise details of such like transactions for the period spanning between 01.01.2007 and December 2009.

3.6. The writ petitioner, promptly, vide, communication dated 21.01.2010, furnished the entire information sought for by the first respondent.

3.7. Evidently, the first respondent took umbrage to the writ petitioner's claim for set off in respect of tax paid on bullion and worn-out jewellery, and accordingly, issued two separate notices of even date i.e. 21.01.2010, relating to the financial years 2008-2009 and 2009-2010.

3.8. By virtue of these notices, the writ petitioner was informed that the ITC could be claimed only