Tvl. Sulochana Medicals vs. The Commercial Tax Officer

Held

The Court held that the issue raised in the writ petition was squarely covered by a previous order of the same Court dated 20.12.2018 in W.P.(MD)No.3744 of 2015 (Shanmugamari Timbers Rep.by its Proprietor M.Selvendran Vs. The Commercial Tax Officer Chokkikulam Assessment Circle Madurai-20). Following this precedent, the Court set aside the impugned order. The Court's reasoning, based on the cited precedent, implies that the assessment order likely suffered from procedural infirmities or misinterpretation of the law concerning the petitioner's turnover classification and Input Tax Credit eligibility. The Court directed that the matter be remitted back to the respondent for passing a fresh order. Crucially, the respondent was directed to afford the petitioner an opportunity of personal hearing. The petitioner was granted four weeks from the date of receiving the order to file their objections. No costs were awarded.

Facts

The petitioner, Sulochana Medicals, represented by its Proprietrix S. Sulochana, filed a writ petition challenging an order dated 16.11.2011 passed by the Commercial Tax Officer, Madurai Rural (South) Assessment Circle. The petitioner sought to quash this order, alleging it was illegal and violative of natural justice. The core of the dispute concerns the assessment of the petitioner's turnover for the year 2010-11. The petitioner requested that their first turnover of Rs. 49,99,999/- be assessed at 0.5% under Section 3(4) of the Tamil Nadu Value Added Tax Act, 2006, and the balance turnover be assessed at 4% under Section 3(2). Additionally, the petitioner sought to avail Input Tax Credit on purchases made from 03.02.2011 and on stock purchased within ninety days prior to that date, as per Section 3(4)(b) of the Act, following their turnover reaching Rs. 50 lakhs.

Key Issues

1. Whether the assessment order dated 16.11.2011 passed by the respondent is illegal and violative of the principles of natural justice, contrary to Sections 3(4), 27, and 28 of the Tamil Nadu Value Added Tax Act, 2006? Petitioner's Arguments: The petitioner contended that the assessment order was illegal and violated principles of natural justice. They argued for a specific tax treatment of their turnover, bifurcating it into two slabs with different tax rates as stipulated in Sections 3(4) and 3(2) of the Tamil Nadu Value Added Tax Act, 2006. Furthermore, they asserted their right to claim Input Tax Credit on eligible purchases and stock as per Section 3(4)(b) of the Act, particularly after their turnover crossed the threshold of Rs. 50 lakhs on 03.02.2011. The petitioner relied on the provisions of the Act, specifically Sections 3(4), 27, and 28, and the statement filed on 30.04.2011. Respondent's Arguments: The judgment does not record any specific arguments made by the respondent.