The main legal point established in the judgment is the distinction between exempted goods and exempted transactions under the Tamil Nadu Value Added Tax Act, 2006, and the inapplicability of Section 84 for rectification in the absence of an apparent error on record.

ORDER :

Prayer: Writ Petitions filed under Article 226 of the Constitution of India, to issue a Writ of Certiorari, calling for the records on the files of the Respondent herein in TIN/33270460111/2011-12 and TIN/33270460111/2012-13, both dated 24.06.2019 quashing the same.

The petitioner in both Writ Petitions is an Oil manufacturing Company, the Indian Oil Corporation Limited (in short ‘IOCL’), a Public Sector Undertaking engaged in the marketing of petroleum products and registered as a dealer under the provisions of the Tamil Nadu Value Added Tax Act, 2006 (in short ‘Act’).

2. In the course of its business, it had purchased Petroleum products, such as Motor Spirit (petrol), High Speed Diesel oil (HSD), furnace oil, Low Sulphur Heavy Stock (LSHS), Bitumen and Naphtha among others. Furnace oil is an input for power generation and is used by HT industrial users as fuel in gensets, to ensure and maintain continuous production.

3. The period in and around 2012 and 2013 saw the State of Tamil Nadu face power shortages and hence the demand for furnace oil at the instance of the HT industrial consumers rose. They approached the State for assistance in this regard and, at their instance, three Notifications came to be issued granting exemption from tax on the sales of furnace oil under Section 30 of the Act.

4. The first is G.O.Ms.No.103 dated 01.08.2012 issued in exercise of powers conferred by Section 30 (1) and (2) of the Act granting exemption in respect of the tax on sale of furnace oil to HT consumers, who are registered under the provisions of the Act for use in Gensets, subject to production of a certificate. The Notification covered the period 01.02.2012 to 30.09.2012.

5. The second is G.O.Ms.No.155 dated 08.12.2012 that continued the exemption granted under the first G.O. and covered the period 01.10.2012 to 31.05.2013, in the same circumstances as earlier, that is, in regard to sale of furnace oil to HT consumers registered under the Act for use in Gensets, upon production of a certificate.

6. The third is G.O.Ms.No.6 dated 06.02.2013, that superceded the second G.O. and expanded the exemption to include sale of furnace oil by one oil company to another oil company, apart from sales to HT consumers registered under Act for use in gensets.

7. The conditions imposed in the 2013 Notification were (i) a requirement that the HT consumers produce a certificate in Form–I annexed to the Notification and (ii) refund of VAT paid was subject to production of original documents such as sale bills and proof of payment of tax as well as certificates in the forms annexed to the Notification. Refunds obtained from the respondent of the tax paid, were to be fully restored to the respective HT consumers.

8. The exemptions span a little over 1 ½ years, from 01.02.2012 to 31.05.2013 and both the petitioner as well as the purchasing dealers have sought and obtained the benefit of the same, upon compliance with the conditions imposed under the Notifications.

9. While this is so, there was a proposal by the respondent to reverse Input tax credit (ITC) under Section 19(5)(a) of the Act for the period 01.02.2012 to 06.02.2013, vide notice dated 08.09.2016. In reply dated 21.10.2016, the main submissions of the petitioner echo the stand of the petitioner in these Writ Petitions.

10. The petitioner submitted that it has effected re-sale of furnace oil to various purchasers charging tax at 5% and ITC had also been availed. Furnace oil was purchased by the purchasing dealers not just from OMCs but also by way of stock transfer from their own refineries or by way of inter-state purchases.

11. Section 15 which speaks of exempted sales is specific to either goods that are exempted by Notification or as specified in the 4th Schedule. Thus, the scope of sales referred to under Section 15 cannot be expanded to other categories of transactions. Section 30 notifies