Madras High Court
Genus Electrotech Ltd vs The Assistant Commissioner Of ... on 17 December, 2018
Author: G.R.Swaminathan
Bench: G.R.Swaminathan
1
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATED : 17.12.2018
CORAM
THE HONOURABLE MR.JUSTICE G.R.SWAMINATHAN
W.P.(MD)No.18032 of 2015 and
M.P.(MD)No.1 of 2015
Genus Electrotech Ltd.,
Represented by its Power Holder and
Deputy General Manager,
R.Raja Gopalachari,
46-C, Municipal Complex Compound,
Melayapalayam, Tirunelveli. ... Petitioner
Vs.
1. The Assistant Commissioner of Commercial Taxes(FAC),
Commercial Taxes Building,
Reserve Lane, Palayamkottai,
Tirunelveli 627 002.
2. The Managing Director,
Electronic Corporation of Tamilnadu,
No.692, Anna Salai, Nandanam,
Chennai – 600 035.
3. The State of Tamil Nadu,
Represented by the Secretary to Government,
Commercial Taxes and Registration Department,
Fort St. George, Chennai. ... Respondents
PRAYER : Writ Petition is filed under Article 226 of the
Constitution of India, to issue a Writ of Certiorari, calling for
the records on the file of the first respondent in Asst.
http://www.judis.nic.in
2
No.33545564636/2011-2012 dated 03.09.2015 and to quash
the same as wholly without jurisdiction, illegal and arbitrary.
(Cause title amended vide order dated 29.03.2016 in M.P.(MD)No.2
of 2015)
For Petitioner : Mr.M.Azeem
For R-1 & R-3 : Mr.Aayiram K.Selvakumar,
Additional Government Pleader.
For R-2 : Mr.R.Sekaran,
for M/s.King and Patridge.
***
ORDER
The petitioner entered into a contract with the Electronic Corporation of Tamil Nadu for supply of 14” colour television sets. The Government of Tamil Nadu had announced an ambitious scheme for their free supply to families who did not have a colour television set. Since it was a welfare measure, the Government issued G.O.Ms.120 Commercial Taxes and Registration(B2) Department, dated 06.10.2006, making an exemption in respect of tax payable on the purchase of colour television sets by the Information Technology Department under the scheme.
http://www.judis.nic.in 3
2. The second respondent Corporation placed a purchase order dated 28.02.2011 on the Writ petitioner for supply of 1,20,500 colour television sets. The purchase order itself mentions that the payment of tax is exempted in view of G.O.Ms.No.120 Commercial Taxes and Registration(B2) Department, dated 06.10.2006. The petitioner was supplying the colour television sets to the second respondent Corporation in terms of the aforesaid purchase order dated 28.02.2011. In the meanwhile, general elections were announced and model code of conduct came into force on 01.03.2011. As a result, further supplies could not be made. As many as 43,554 colour television sets were lying in the petitioner's godown. In the meanwhile, following the election results, a new Government took over. As a result, there was also a change in policy. G.O.Ms.2D No.12 Information and Technology(kp.M2) Department, dated 06.06.2011 was issued giving up further procurement. However, it was announced that the television sets that are already been manufactured will be taken and distributed among the various institutions such as Schools, http://www.judis.nic.in 4 Hospitals, Primary Health Centres, Anganvadi Centers, Orphanages, Taluk Offices etc. Since G.O.Ms.2D No.12 Information and Technology(kp.M2) Department, dated 06.06.2011 itself provided for lifting the already manufactured colour television sets of 43,554 numbers lying in the petitioner's godown, they were taken by the second respondent Corporation.
3. The petitioner is an assessee registered with the first respondent. The first respondent took the stand that the original notification, namely, G.O.Ms.No.120 Commercial Taxes and Registration(B2) Department, dated 06.10.2006, contemplated granting exemption in respect of tax payable on the purchase of colour television sets by the Information Technology Department, under the scheme of free disbursement of the said sets to the families who did not own the colour television sets. But 43,554 colour television sets lifted from the petitioner's godown after 01.03.2011 were distributed not among the families who did not own the colour http://www.judis.nic.in 5 television sets, but only to various Government departments. Therefore, the first respondent took the stand that the exemptions under the aforesaid notification was no longer available. Since the specific exemption notification was not available in the petitioner's case in respect of 43,554 colour television sets, the first respondent proposed to levy the tax of Rs.1,57,69,379/-. The said tax component amount was retained by the second respondent while settling the petitioner's bill. It appears that the second respondent has retained a sum of Rs.54 Lakhs.
4. Now the only issue is whether the first respondent is justified in levying tax on the sale of 43,554 colour television sets by the petitioner to the second respondent.
5.The approach of the first respondent can only be characterised as wooden headed. The Government introduced a freebie scheme for supplying colour television sets to the families who did not own the colour television sets. The second http://www.judis.nic.in 6 respondent Corporation was to make the purchase. The second respondent entered into a contract with the Writ petitioner. Even the purchase order issued by the second respondent in favour of the Writ petitioner clearly indicates that no tax is payable in respect of the transaction in question. The reason is obvious. It was a welfare measure. The object of the scheme was to benefit the poor families. After the change of the Government, there was also a change of policy. The new Government decided to not to continue the freebie scheme. It therefore chose to discontinue further procurement. But then, something must be done with the colour television sets that have already been manufactured. Instead of distributing the same to individual families, it was decided to distribute them among various Government departments and other deserving institutions like Orphanages etc. In other words, the scheme was implemented. Only the beneficiaries changed. Because there was a change in the end user, the exemption granted in the first instance will not stand automatically withdrawn. The learned counsel appearing for the Writ petitioner placed reliance on the http://www.judis.nic.in 7 decision reported in (1979) 44 S.T.C. 42(SC)(MOTILAL PADAMPAT SUGAR MILLS CO. LTD. V. STATE OF U.P.(S.C.)) and (1987) 65 S.T.C. 1 (SC) (POURNAMI OIL MILLS V. STATE OF KERALA(S.C.). He would contend that the doctrine of promissory estoppel will be clearly applicable in this case.
6. I am of the view that the notification issued vide G.O.Ms.No.120 Commercial Taxes and Registration(B2) Department, dated 06.10.2006, will continue to apply notwithstanding the change in the end user.
7. In this view of the matter, the order impugned in this Writ petition stands set aside. The Writ petition stands allowed, accordingly. No costs. Consequently, connected Miscellaneous petition is allowed.
17.12.2018 Index : yes/No Internet:Yes/No pmu http://www.judis.nic.in 8 G.R.SWAMINATHAN,J.
pmu To
1. The Assistant Commissioner of Commercial Taxes(FAC), Commercial Taxes Building, Reserve Lane, Palayamkottai, Tirunelveli 627 002.
2. The Managing Director, Electronic Corporation of Tamilnadu, No.692, Anna Salai, Nandanam, Chennai – 600 035.
3. The State of Tamil Nadu, Represented by the Secretary to Government, Commercial Taxes and Registration Department, Fort St. George, Chennai.
W.P.(MD)No.18032 of 2015 and M.P.(MD)No.1 of 2015 17.12.2018 http://www.judis.nic.in 9 http://www.judis.nic.in