In a major relief to Philips India Limited, the writ petitioner, a Single Bench of the Madras High Court ordered to redo assessment as per Section 18 of the Tamil Nadu Value Added Tax (TNVAT) Act, 2006.
The petition was filed under Article 226 of the Constitution of India praying to issue a writ of certiorarified mandamus calling for the records on the files of the 2nd respondent, Joint Commissioner (CT) (Appeals), quashing the same, while directing the second respondent herein to re-dispose the appeal of the petitioners arising out of the assessment of the First Respondent, Deputy Commissioner (CT).
Section 18 of the TNVAT Act states that there shall be zero rate sale for the purpose of this Act, and shall be eligible for input tax credit or refund of the amount of the tax paid on the purchase of goods specified in the First Schedule including capital goods, by a registered dealer in the State, subject to such restrictions and conditions as may be prescribed:- (i) A sale as specified under sub-section (1) or (3) of section 5 of the Central Sales Tax Act, 1956 (Central Act 74 of 1956);
(ii) Sale of goods to any registered dealer located in Special Economic Zone in the State if such registered dealer has been authorised to establish such units by the authority specified by the Central Government in this behalf; and
(iii) Sale of goods to International Organisations listed out in the Fifth Schedule.
A Division Bench of the Court in W.A.No.703 of 2020 and batch dated 28.02.2023 observed that “In cases where the subject matter of challenge are orders of Assessments, the same are set aside and the matters are remanded back to the Assessing Authority. It is open to the Revenue to redo the assessment keeping in view the law declared by this Court as to the construct of Section 18 of the TNVAT Act.”
The Court of Dr Justice Anitha Sumant held that “In light of the aforesaid conclusions these assessments are set aside and the matter remanded to the Assessing Authority to re-do the de novo hearing bearing in mind the observations of this Court noted above.”
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