Tvl. M-Gen Power Systems (PVT) LTD. vs. The Commissioner Of Commercial Taxes

Held

The Court held that the amendment to Section 19(2)(v) of the TNVAT Act, 2006, by the 2015 amendment, was retrospective. The Court relied on a previous decision of a learned Judge of the same High Court in Tvl. Bharath Traders Vs. The Commissioner of Commercial Taxes, Chennai and other (W.P.(MD)No.15103 of 2017), dated 30.08.2019. In that case, it was held that since the substitution sought to correct an anomaly, it should be effective from the inception of the Act. The Court distinguished the present case from the Supreme Court's decision in M/s. TVS Motor Company Ltd. by noting that the retrospective applicability of the amendment was not considered in the latter. Consequently, the Court found that the impugned orders, which reversed ITC based on the un-amended provision for transactions in 2014-15, were not sustainable. The Court quashed the impugned orders and allowed the writ petitions.

Facts

The petitioners, Tvl. M-GEN POWER SYSTEMS (PVT) LTD. and Tvl. BARCOL POWER CONTROL (P) LTD., filed two writ petitions challenging orders dated 30.12.2020 passed by the State Tax Officer, Madurai Rural South Circle. The orders concerned the assessment year 2014-15. The petitioners had effected inter-state sales, some with C-Form declarations and some without. The assessing officer reversed the input tax credit (ITC) availed by the petitioners on inter-state sales made without C-Form declarations. The respondents contended that Section 19(2)(v) of the TNVAT Act, as amended, came into force only from 01.04.2015, and the transactions in question occurred prior to this amendment. They also cited the Supreme Court's decision in M/s. TVS Motor Company Ltd. upholding the validity of the un-amended provision.

Key Issues

1. Whether Section 19(2)(v) of the TNVAT Act, as amended by the 2015 amendment, is retrospective in its application to transactions that occurred in 2014-15? This question turns on the interpretation of the amendment and its effect on the statutory scheme. Petitioner's contention: The petitioners implicitly argue that the amendment should be applied retrospectively to cover the period in question, likely by relying on judicial interpretations that give effect to legislative intent to correct anomalies. Revenue's contention: The respondents argued that the amendment to Section 19(2)(v) of the TNVAT Act was effective only from 01.04.2015, and therefore, it does not apply to the transactions of 2014-15. They relied on the Supreme Court's decision in M/s. TVS Motor Company Ltd. Vs. The State of Tamil Nadu and others, which upheld the validity of the un-amended provision.