M/S.Sri Balaji Assembiles & v. The State Of Tamilnadu

IN THE HIGH COURT OF JUDICATURE AT MADRAS

Dated: 07.09.2020

CORAM

THE HONOURABLE MR. JUSTICE M.S. RAMESH W.P.No.3852 of 2015 and M.P.No.1 of 2015 M/s.Sri Balaji Assemblies & Plastic Pvt.Ltd., Rep. by its Director, 176, Vengaivasal Main Road, Santhosapuram, Chennai - 600073.

...Petitioner

.Vs.

1. The State of Tamil Nadu, Rep. by its Secretary, Commercial Taxes Department, Fort St.George, Chennai.

2. The Assistant Commissioner (CT), Selaiyur Assessment Circle, Chennai.

...Respondents

Prayer: Writ Petition filed under Article 226 of the Constitution of India praying to issue a Writ of Certiorarified Mandamus, to call for the records of the 2nd respondent in TIN/33350943709/2014-15 and quash the order dated 20.01.2015 passed therein and further direct the 2nd respondent not to apply Sec.2(1) of the Tamil Nadu Value Added Tax (Fifth Amendment) Act, 2013 to the petitioner herein in as much as the petitioner is a manufacturer of goods in the State of Tamil Nadu. For Petitioner : Mr.R.L.Ramani, SC for Mr.B.Raveendran For Respondents: Mr.R.Swarnavel Government Advocate

O R D E R

Today, the matter is listed through Video Conferencing. By consent of both the parties, the Writ Petition is taken up for final disposal.

2. The issue involved in the present Writ Petition,

challenging the finding of the Assessing Authority that there is no discrimination of manufacturer or trader in providing restriction to Input Tax Credit, has already been considered by this Court in the decision in Everest Industries Limited vs. The State of Tamil Nadu and others reported in (2017) 100 VST 158 (Mad) in the following manner:

20. A careful reading of Section 19 would show that a dealer is entitled to claim ITC in respect of tax suffered inputs, which are specified in the First Schedule, and are purchased within the State from a registered dealer, and therefore, are used for the purpose set out in the clauses (i) to (vi), as delineated in sub-section

(2) of Section 19 of the 2006 Act.

20.1. The proviso to sub-section (2) of Section 19 limits the availment of ITC by providing that ITC shall be allowed in excess of 3% of the tax for the purpose specified in clause (v). Clause (v), if read with sub-section (2) of Section 19 would have me conclude that, if, an assessee were to purchase taxable goods specified in the First Schedule, which were sold in the course of Inter-State Trade or Commerce against declarations made in form 'C', an assessee would be allowed ITC only in excess of 3% of the tax paid on such purchases.

20.2. Therefore, there is, no my mind, nothing in the proviso, which will have me come to the conclusion that, it is attracted to any of the other clause referred to in sub-section (2) of Section 19 of the 2006 Act.

3. The aforesaid extract is self explanatory. As such, the finding of the authority that there is no discrimination of a manufacturer or trader under Section 19(2) of the TNVAT Act, is opposed to the aforesaid decision and hence, cannot be sustained.

4. For the foregoing reasons, the impugned order dated 20.01.2015 passed by the second respondent is quashed and accordingly, the Writ Petition stands allowed. No costs. Consequently, connected miscellaneous petition is closed. Sd/- Assistant Registrar //True copy// Sub Assistant Registrar

To

1. The Secretary, Commercial Taxes Department, Fort St.George, Chennai.

2. The Assistant Commissioner (CT), Selaiyur Assessment Circle, Chennai.

+1cc to the Spl. Government Pleader (Taxes), Sr.No.29319 W.P.No.3852 of 2015 and M.P.No.1 of 2015 kj (co) rr ii (12/10/2020)