The single bench of the Madras High Court, in a recent decision, held that the assessment under the Tamil Nadu Value Added Tax Act can be completed on the basis of the advance ruling, if the goods under dispute are similar to the goods covered by the advance ruling. The court was considering a petition challenging the clarification issued by the Commissioner of Commercial Taxes filed by the assessee.
The sole grievance of the Petitioners was that the Assessing authority has completed the assessments solely placing reliance on the Advance Ruling, given by the Authority for Clarification and Advance Ruling, by proceedings dated 2.12.2013,regarding the rate of tax of the goods which is similar to the goods dealt by the petitioners.The petitioners, challenged the clarification issued by the Commissioner, contending that the Commissioner of Commercial Taxes has no power to issue Clarification with regard tax rate of tax. Further, the Circular issued by the Commissioner of Commercial Taxes has no legal authority. The petitioners referred the decisions in the cases of Pizzeria Fast Foods Restaurant (Madras) Pvt.Ltd., vs. Commissioner of Commercial Taxes, Chennai and Others and Texx One Private Ltd., vs. Principal Commissioner and Commissioner of Commercial Taxes, Chepauk, Chennai and another, on support of the above contentions.
Justice T.S Sivagnanam found that the impugned proceeding dated 2.12.2013 is not a Clarification or circular issued by the Commissioner. In the view of the Court, it is a proceedings of the Authority for Clarification and Advance Ruling, exercising power under Section 48-A of the TNVAT Act, 2006. “Therefore, if the product is of the same nature, then obviously the assessing officer will apply the Advance Ruling. If according to the petitioner, the product manufactured by them is slightly different and the Advance Ruling is not applicable, then they have to file a revision petition before the concerned authority, in terms of Section 48-A(4) of the TNVAT Act, 2006. The Advance Ruling Authority has power to review, amend or revoke its Clarification or advance ruling at any time for good and sufficient cause, after giving an opportunity of being heard to the affected parties. Therefore, if the petitioner’s case is that the Clarification would not apply to their case, or if it is erroneous, then, they have to approach the authority by seeking for review of the orders,” the Court observed.
On the basis of the above findings the Court disposed the matter with a direction to the petitioners to approach the authority for Clarification and Advance Ruling.
Read the full text of the order below.
