M/S.Kwality Agencies, v. The Assistant Commissioner
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED :22.07.2019
CORAM
THE HON'BLE MR.JUSTICE M.S.RAMESH W.P.Nos.12102 & 12103 of 2012 and M.P.Nos.1 & 1 of 2012 M/s.Kwality Agencies, Rep.by its Proprietor R.Srinivasan, 14, Gurumoorthy Street, Perambur, Chennai - 600 011.
..Petitioner in both WPs.
Vs.
The Assistant Commissioner (CT), Perambur I Assessment Circle, No.256, Paper Mills Road, Chennai - 600 011.
..Respondent in both WPs.
Common Prayer:
Petition filed Under Article 226 of the Constitution of India praying to issue a Writ of Certiorarified Mandamus, calling for the records of the proceedings of the respondent in TIN 33611040663/2007-08 & 2008-09, dated 31.01.2012 quash the same, and further direct the respondent to consider the objections filed by the petitioner.
For Petitioner : Mr.R.Kumar For Respondent : Mrs.Dhanamadhri Government Advocate ..in both WPs.
COMMON ORDER The Hon'ble Supreme Court of India in a decision reported in [2016] 96 VST 1 (SC) in the case of Jayam & Co. vs. Assistant Commissioner and Another, while upholding the vires of Section 19 (20), had strike down the retrospective effect given to the amendment Act, 2010.
2. In the present cases, through the revised impugned orders
dated 31.01.2012, the revised assessment order was made wherein it was stated that the credit notes were issued for price difference, prompt payment within grace period etc., and while issuing the said credit notes, the seller had communicated the amount without charging any VAT and thereby it came to be confirmed that they have received the credit notes and failed to prove the basis of bifurcation of the value of the credit notes. Hence, credit notes issued by the dealer to nullify the value addition at the buyers end are treated as suppressed turnover and accordingly, the penalty was also imposed.
3. In the case of Jayam & Co. vs. Assistant Commissioner (Supra), the Supreme Court had held as follows: "11....when we keep in mind the aforesaid parameters laid down by this Court in testing validity of retrospective operation of fiscal laws, we find that the amendment in question fails to meet these tests. The High Court has primarily gone by the fact that there was no unforeseen on unforeseeable financial burden imposed for the past period. That is not correct. Moreover, as can be seen, sub-section (20) of section 19 is altogether new provision introduced for determining the input tax in specified situation, i.e., where goods are sold at a lesser price than the purchase price of goods. The manner of calculation of the ITC was entirely different before this amendment.
In the example, which has been given by us in the earlier part of the judgment, "dealer" was entitled to ITC of Rs.10 on resale, which was paid by the dealer as VAT while purchasing the goods from the vendors. However, in view of Section 19(20) inserted by way of amendment, he would now be entitled to ITC of Rs.9.50. This is clearly a provision which is made for the first time to the detriment of the dealers. Such a provision, therefore, cannot have retrospective effect, more so, when vested right had accrued in favour of these dealers in respect of purchases and sales made between January 1, 2007 to August 19, 2010.
(20) of section 19, we set aside and strike down amendment Act 22 of 2010 whereby this amendment was given retrospective effect from January 1, 2007."
4. The aforesaid observations of the Hon'ble Apex Court are self-explanatory and as such, the impugned order in the present writ petitions are opposed to the decision rendered by the Hon'ble Supreme Court. Hence, cannot be sustained.
5. From the light of the above observations, the impugned order in proceedings No. TIN/33611040663, pertaining to the Assessment years 2007-08 & 2008-09, dated 31.01.2012 on the file of the Assistant Commissioner(CT), Perambur, is set aside and the matter is remanded back to the respondent herein for fresh consideration and petitioner is at liberty to file his
objections along with the copy of decisions of the Hon'ble Supreme Court , in the case of Jayam & Co. vs. Assistant Commissioner and Another, within a period of fifteen days from the date of receipt of a copy of this order. On receipt of such objections, if any, the respondent herein shall consider the same on its own merits and pass appropriate orders, in accordance with law after giving due opportunity to the petitioner including the opportunity of personal hearing within a period of sixty days from the date of receipt of a copy of this order.
6. With the above observations, the writ petitions stand allowed. No costs. Consequently, connected miscellaneous petitions are closed.
Sd/- Assistant Registrar(CCC) //True Copy// Sub Assistant Registrar Pns To The Assistant Commissioner (CT), Perambur I Assessment Circle, No.256, Paper Mills Road, Chennai - 600 011.
+1cc to Mr.R.Kumar, Advocate, S.R.No.62556 +1cc to the Special Government Pleader, S.R.No.63015 W.P.Nos.12102 & 12103 of 2012 KK(CO) CS/18/09/2019