Madras High Court
Tvl.National Power Press vs The Special Committee U/S 16 D on 3 January, 2020
Author: C.Saravanan
Bench: C.Saravanan
W.P.Nos.27810 & 27811 of 2016
N THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 03.01.2020
CORAM:
THE HONOURABLE MR.JUSTICE C.SARAVANAN
W.P.Nos.27810 & 27811 of 2016
and
W.M.P.Nos.23985, 23986 & 23987 of 2016
Tvl.National Power Press,
Rep.by its Partner,
R.Raguraman,
No.2542 Rajagopalasamay Koil St,
Thanjavur – 9. ... Petitioner in both W.Ps.
Vs.
1.The Special Committee U/s 16 D
of the TNGST Act, 1959,
Secretariat, Chennai 600 009.
2.The Commercial Tax Officer,
Thanjavur II Assessment Circle,
Thanjavur. ... Respondents in both W.Ps.
Prayer in W.P.No.27810 of 2016: Writ Petition is filed under article 226 of the
Constitution of India, Writ of Certiorari, calling for the records of the First
Respondent in SCP No.01/2016 Ref No.M1/3606/2015 dated 16/06/2016 relating to
Assessment Year 2002-2003 and quash the same.
Prayer in W.P.No.27811 of 2016: Writ Petition is filed under article 226 of the
Constitution of India, Writ of Certiorari, calling for the records of the First
Respondent in SCP No.01/2016 Ref No.M1/3606/2015 dated 16/06/2016 relating to
Assessment Year 2004-2005 and quash the same.
1/12
http://www.judis.nic.in
W.P.Nos.27810 & 27811 of 2016
For Petitioner : Mr.P.R.Kumar
(in both W.Ps.)
For Respondents : Mr.V.Haribabu
(in both W.Ps.) Additional Government Pleader(T)
COMMON ORDER
The petitioner a partnership concern was engaged in the printing of bus the tickets for Tamil Nadu State Transport Corporation, Salem. During the assessment year 2000-2001, 2002-03 and 2004-2005, the petitioner supplied printed tickets to the aforesaid Corporation and filed returns which were accepted assessment. For the assessment year 2000-2001, the assessment was completed vide order dated 24.12.2001 which was reopened vide notice dated 24.12.2001.
2.By an order dated 21.3.2005 the demand proposed in the revision notice was confirmed stating that the sale of printed materials to the aforesaid Corporation was liable to tax. Against the said order the petitioner preferred an appeal.
3.The Appellate Deputy Commissioner set aside the order passed in the revision and remitted the case back to the 2nd respondent for passing a fresh order in the light of the decisions and clarifications of the Department. 2/12 http://www.judis.nic.in W.P.Nos.27810 & 27811 of 2016
4.The 2nd respondent by an order dated 20.03.2006 accepted the petitioner’s case in terms of clarification issued by the Commissioner of Commercial Taxes to Tvl. Kalaimagal Nilayam vide clarification dated 08.02.2006 obtained under Section 28 A of the Tamil Nadu General Sales Tax Act, 1959 wherein it was classified as follows:-
“Printing and supply of bus tickets to various transport Corporation under specific contractual agreements falls under the category of works contract liable to tax under Section 3B of the Tamil Nadu General Sales Tax Act, 1959.”
5. For the assessment year 2002-2003 vide order dated 31.10.2007 the 2nd respondent in a revisional proceedings however concluded that petitioner was liable to pay tax on the bus ticket manufactured and supplied to Transport Corporation under Entry 40 (iv) of Part C of the 1st Schedule to the Tamil Nadu General Sales Tax Act, 1959. A similar order came to be passed for the assessment year 2004-2005 vide order dated 01.11.2007.
6.Against these 2 orders of the 2nd respondent, the petitioner filed petitions under Section 16-D of the Tamil Nadu General Sales Tax Act, 1959.
7.Vide orders dated 06.12.2010, the 1st respondent had affirmed the views of the 2nd respondent and rejected the application filed by the petitioner 3/12 http://www.judis.nic.in W.P.Nos.27810 & 27811 of 2016 under Section 16-D of the Tamil Nadu General Sales Tax Act, 1959. Under these circumstances, the petitioner filed W.P.Nos.2887 to 2888 of 2011 before this court and challenged the said order of the 1st respondent.
8.By an order dated 05.04.2011, this court had quashed the orders of the 1st respondent and directed 2nd respondent to dispose the case in the light of the decision of the this court in Bharat Offset and others Vs. Tamil Nadu Taxation Special Tribunal and Another, (2010) 34 VST 342 (Mad) within a period of 4 weeks.
9.Pursuant to these orders dated 05.04.2011 of this court, fresh orders were passed by the 2nd respondent on 30.09.2013 for the respective assessment years. Under these circumstances, the petitioner once again filed petitions under Section 16-D of the Tamil Nadu General Sales Tax Act, 1959 before the 1st respondent which have culminated in the orders dated 03.11.2014 for the respective Assessment Years. The petitioner once again challenged the said order before this court in W.P.Nos.34070 & 34071 of 2014.
10.By an order dated 22.12.2014 of this Court in these two writ petitions, the impugned orders of the 1st respondent were set aside with the 4/12 http://www.judis.nic.in W.P.Nos.27810 & 27811 of 2016 direction to the 1st respondent to consider the petitioner’s application dated 26.08.2014 on merits and in accordance with law after affording an opportunity of personal hearing to the petitioner.
11.Pursuant to the aforesaid common order of this court, the impugned orders dated 16.06.2016 were passed by the 1st respondent. In the impugned orders, the 1st respondent has concluded that it has no powers to judge the merits of the orders passed by the 2nd respondent assessing officer and only a statutory appeal lies to test the legality on the merits of the assessment/reassessment orders of the 2nd respondent.
12. Assailing the impugned order the petitioner has come by way of the present writ petitions for the 3rd time. The learned counsel for the Petitioner further relied on the following decisions:-
i. The State of Tamil Nadu Vs Tvl. Subramaniam Offset Printers, 2015 SCC OnLine Mad 7606.
ii. The State of Tamil Nadu Vs. Tvl.Prakash Fine Arts and Printers and another and etc, order dated 09.11.2016, passed by Madurai Bench of this Court in W.A.(MD).Nos.342 of 2011 and etc. iii. The Deputy Commissioner of Commercial Taxes Vs. Tvl.5/12
http://www.judis.nic.in W.P.Nos.27810 & 27811 of 2016 Nathan and Company, order dated 04.05.2017, passed by Madurai Bench of this Court in T.C.R.(MD).No.655 of 2006. iv. State of Tamil Nadu Vs. Tvl. National Power Press, order dated 28.11.2018 passed by Madurai Bench of this Court in STA.410 of 2001 and etc.
13.The learned counsel for the petitioner further submits that the contract was that of a works contract and not that of a sale simplicitor and therefore, rejection of the petitioner's Application under Section 16-D of the TNGST Act by the Respondent, cannot be sustained. According to him, the issue now stands covered by a decision of the Division Bench of this Court in the State of Tamil Nadu Vs. Tvl. Subramaniam Offset Printers, 2015 SCC OnLine Mad 7606. In the Tvl. Subramaniam Offset Printers' case referred supra, a Division Bench of this Court followed the another decision of this Court in State of Tamil Nadu Vs. Premier Litho Works, [2009] 26 VST 205 (Mad), wherein it was held as follows:-
“14. As far as the present case is concerned, the work executed by the assessee related to printing of materials and such printed materials are meant for particular customers, who placed orders and it cannot be sold in the open market like any other goods. Going by the principle laid down in the above-said decision of the Apex Court, which was followed by this Court in the subsequent decisions, we have no hesitation in accepting the case of the assessee that the transaction in question does not call for any liabililty under the Act. As pointed out by the Apex Court, the mere fact that in the 6/12 http://www.judis.nic.in W.P.Nos.27810 & 27811 of 2016 execution of the contract for work, the paper owned by the assessee stands transferred to the contractee incidentally would not lead to the inference that the transaction is only a sale and not a works contract.”
14.The decision of this Court in State of Tamil Nadu Vs. Prmier Litho Works, [2009] 26 VST 205 (Mad) was affirmed by the Hon'ble Supreme Court in C.A.No.10162 of 2010, passed by an order dated 03.08.2016.
15.The learned counsel for the petitioner further submits that once a clarification is adopted, it cannot be deviated, unless there is a change in the provisions due to statutory amendment or orders of the Appellate Authority. The order for the Assessment Year 2000-2001 was passed on 20.03.2006 cannot be ignored. The Commissioner of Commercial Taxes issued clarification to one Tvl.Kalaimagal Nilayam vide clarification No.45/2003 dated 28.02.2003. The clarification is much prior to the order passed for the Assessment Year 2000-2001. In the absence of any change of provisions, the Assessing Authority ought not to have deviated from the earlier clarification.
16.Per contra, the learned counsel for the Respondent submits that the impugned order passed under Section 16-D of the said Act is well reasoned and requires no interference. The only ground made out is that there is violation of 7/12 http://www.judis.nic.in W.P.Nos.27810 & 27811 of 2016 the principles of natural justice. He further submits that under those circumstances, a Special Committee can set aside the order of the Assessing Officer and direct such officer to make further Assessment Orders under Section 16-D of the said Act. It is submitted that the Special Committee constituted under Section 16-D of the Act is not an Appellate Authority and therefore such a Committee cannot decide the case on merits. It is therefore submited that the impugned order passed by the Special Committee is sustainable and consequently, the writ petition is liable to be dismissed.
17.Heard the learned counsel for the Petitioner and the learned counsel appearing for the Respondent.
18.The issue as to whether the activity undertaken by the petitioner while suppling printed tickets as per the contract is a sale simplicitor or Works Contract now stands affirmed by the Division Bench of this Court, cited supra.
19.Therefore, on merits the issue stands squarely covered in favour of the petitioner. Further, the appeal filed on behalf of the Respondent as such was also dismissed by the Hon'ble Supreme court on 03.08.2016 in Civil Appeal No.(S). 10162 of 2010. That apart, the 2nd respondent has already held that the activity 8/12 http://www.judis.nic.in W.P.Nos.27810 & 27811 of 2016 undertaken by the petitioner would not attract tax under Entry No.40(iv) of Part C of the 1st schedule to the TNGST Act, 1959.
20.It has also been clarified vide clarification No.321/2002, D.Dis. Act Cell – 11/72124/2002 dated 09.12.2002 as follows:-
Printing and supply of bus tickets: The Kerala High Court in the case of Deputy Commissioner of Sales Tax (Law Vs. Victory Offset Printers (94 STC 406) has held that supply of printed tickets to a Transport Corporation was works contract and not a transaction of sale of goods. The Special Leave Petition filed by the State against this decision was dismissed by the Supreme Court of India (83 STC 17 of FORSC). It is clarified that printing and supply of bus tickets to various Transport Corporation under specific contractual agreement falls under the category of work contract, liable to tax under Section 3-B of the TNGST Act, 1959.
21.Further, by clarification dated 28.02.2003 bearing reference No. D.Dist.Acts Cell-II/75970/2002, Clarification No.45/2003 issued to Tvl.Kalaimagal Nilayam, it was clarified as follows:-
The details furnished by the petitioners have been perused and the following clarification on rate of tax is issued:
“1.Printing and supply of bus tickets to various Transport Corporations under specific contractual agreement falls under the category of works contract, lible to tax under Section 3-B of the TNGST Act'59.
2.Printing and supply of books and stationery items according to specification of customers would fall under 9/12 http://www.judis.nic.in W.P.Nos.27810 & 27811 of 2016 entry No.40(iv) in Part – C of the First Schedule to the TNGST Act'59, taxable at 10%.
3.Dealers who carry on the business of printing may, at their option pay tax at 3% on the total turnover, which they can collect from customers.
4.Form XVII can be issued only if the finished product is sold. Thus if a printer executes works contract (not amounting to manufacture and sale) he is not eligible to issue Form XVII for purchase of paper and ink. Separate compounded levy of tax which is optional does not alter the basic structure of Section 3(3). Hence printer paying tax under Section 3-G is not eligible to issue Form XVII in respect of purchase for use in works contract.
5.Petitioners are liable to pay resale tax at 1% under Section 3-H of the TNGST Act'59, wherever they claim exemption as second sale.”
22.The petitioner asked for a separate clarifications from the Commissioner of Commercial Taxes, Chepauk. By communication dated 08.02.2006 bearing reference No. K.Dis.Acts Cell-Ii/56789/2005 which was signed by the Deputy Commercial Tax Officer on 10.02.2006, the clarification issued to Tvl.Kalaimagal Nilayam was enclosed as clarification to the petitioner. Therefore, there is no justification in deviate from such clarification either by the 2nd respondent while passing assessment or re-assessment orders or by the 1st respondent Special Committee under Section 16-D of the TNGST Act, 1959. 10/12 http://www.judis.nic.in W.P.Nos.27810 & 27811 of 2016
23.In the light of the above discussion, the impugned orders are quashed. Accordingly, both the Writ Petitions stand allowed with consequential relief to the petitioner. No costs. Consequently, connected Miscellaneous Petitions are closed.
03.01.2020 Index : Yes / No Internet : Yes/ No jas / jen To
1.The Commissioner of Income Tax (Appeals), Uthamargandhi Road, Nungambakkam, Chennai – 600 034.
2.The Joint Commissioner of Income Tax, Non-Corporate Range-22, No.7, Ramakrishna Street, West Tambaram, Chennai – 600 045.
3.The Income Tax Officer, Non-Corporate Range-22, No.7, Ramakrishna Street, West Tambaram, Chennai – 600 045.
4.The Deputy Director of Income Tax (INV), Unit – II(3), Nungambakkam, Chennai – 600 034.
5.The Branch Manager, Karur Vysya Bank, No.27-A, Venkatesa Chowdry Street, Tambaram West, Chennai – 600 045.
11/12 http://www.judis.nic.in W.P.Nos.27810 & 27811 of 2016 C.SARAVANAN, J.
jas
6.The Branch Manager, ICICI Bank Ltd, Tambaram, Chennai – 600 045.
7.The Branch Manager, Tamilnadu Merchantile Bank Ltd, No.33, Sivashanmugam Street, Tambaram West, Chennai – 600 045.
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