Madras High Court
Tvl.A.S.Enterprises vs The State Tax Officer on 3 July, 2018
Author: T.S.Sivagnanam
Bench: T.S.Sivagnanam
In the High Court of Judicature at Madras
Dated : 03.7.2018
Coram :
The Honourable Mr.Justice T.S.SIVAGNANAM
Writ Petition Nos.5448 to 5452 of 2018 &
WMP.Nos.6714 to 6718 of 2018
Tvl.A.S.Enterprises, rep.by its
Partner ...Petitioner
Vs
The State Tax Officer, Office of
the Assistant Commissioner (ST),
Nanganallur Assessment Circle,
Chennai. ...Respondent
PETITIONS under Article 226 of The Constitution of India praying for the issuance of Writs of Certiorari to call for the records of the respondent in orders dated 24.1.2018 respectively in TIN 33610988186/2011-12, TIN 33610988186/2012-13, TIN : 33610988186/2013-14, TIN : 33610988186/ 2014-15 and TIN : 33610988186/2015-16 and quash the same.
For Petitioner : Mr.Adithya Reddy
For Respondent : Mr.M.Hariharan, AGP
COMMON ORDER
Heard both. By consent, the writ petitions are taken up for joint disposal.
2. The petitioner has filed these writ petitions challenging the assessment orders passed by the respondent under the provisions of the Tamil Nadu Value Added Tax Act, 2006 for the years from 2011-12 to 2015-16.
3. The short issue, which falls for consideration, is with regard to the rate of tax on moulded plastic footwear hawai chappals and straps, which were marketed by the petitioner.
4. Among other things, the petitioner has placed heavy reliance on the proceedings of the Authority for Clarification and Advance Ruling dated 24.7.2015 in ACAAR.No.3/2015-16 on an application filed by one M/s. Elastrex Polymers (P) Limited. The clarification sought for was with regard to the rate of tax on moulded plastic footwear hawai chappals and straps. In the application, the said applicant stated that they had been manufacturing the said product and marketing under the registered brand name 'Paragon'. The Authority for Clarification and Advance Ruling took up the case and after considering the nature of the product, issued the following clarification :
It may be therefore clarified that sale of moulded plastic footwear, hawai chappals and straps with the registered brand name 'Paragon' are
(i) liable to exemption from VAT if the sale price is less than Rs.200/- under Entry 30 of Part B of Fourth Schedule to the TNVAT Act, 2006; and
(ii) liable to tax at the rate of 5% if the sale price is Rs.200/- and more under Entry 84 of Part B of First Schedule to the TNVAT Act, 2006.
5. It is no doubt true that in the clarification, it has been stated that the product is registered with the brand name 'Paragon'. However, what is required to be seen is with regard to the rate of tax as per the clarification given by the Authority for Clarification and Advance Ruling on the sale of moulded plastic footwear, hawai chappals and straps. The Authority stated that the said product is liable for exemption from value added tax if the sale price is less than Rs.200/- under Entry 30 of Part B of Fourth Schedule to the Tamil Nadu Value Added Tax Act, 2006 and is liable to tax at the rate of 5% if the sale price is Rs.200/- and more under Entry 84 of Part B of First Schedule to the said Act.
6. When the petitioner has placed reliance on the said proceedings of the Authority for Clarification and Advance Ruling, the respondent declined to take note of the same on the ground that the Authority clarified only to the registered brand name 'Paragon'. In my considered view, the respondent misread the clarification issued by the Authority for Clarification and Advance Ruling. What has been clarified is with regard to sale of moulded plastic footwear, hawai chappals and straps.
7. It is no doubt true that the applicant before the Authority for Clarification and Advance Ruling marketed the product under the registered brand name 'Paragon'. However, the rate of tax is to be determined by the product and not by the brand name and what is to be examined is as to whether the petitioner actually marketed the moulded plastic footwear, hawai chappals and straps. This exercise has not been done by the Assessing Officer.
8. In the counter, in paragraph 8, the Assessing Officer had stated that though the advance ruling is binding on the respondent, the petitioner did not furnish any evidence to show that the advance ruling squarely applies to them also. Thus, if the petitioner is in a position to prove that the product marketed by them are, in fact, moulded plastic footwear, hawai chappals and straps, then the decision of the Authority for Clarification and Advance Ruling dated 24.7.2015 can very well be applied to the petitioner's case/product marketed by them. Hence, this Court is of the considered view that the matter requires to be reconsidered by the respondent.
9. Accordingly, the writ petitions are allowed, the impugned orders are set aside and the matters are remanded to the respondent for a fresh consideration. The petitioner shall produce full details from the manufacturer, from whom, they procure the product to establish the fact that what has been marketed by them are moulded plastic footwear, hawai chappals and straps. After considering the entire material placed before the respondent as well as the documents that the petitioner may produce, the respondent shall redo the assessment after affording an opportunity of personal hearing. No costs. Consequently, the connected WMPs are closed.
03.7.2018 T.S.SIVAGNANAM,J RS Internet : Yes To The State Tax Officer, Office of the Assistant Commissioner (ST), Nanganallur Assessment Circle, Chennai WP.Nos.5448 to 5452 of 2018& WMP.Nos.6714 to 6718 of 2018 03.7.2018