2024-VIL-29-MAD
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VAT High Court Cases

Tamil Nadu Tax on Entry of Goods into Local Areas Act, 2001 - Entry Tax assessments – Bar of limitation – assessment of inter-state transfer of washing machines meant for sales to CSD – whether the impugned assessment orders are barred by limitation – applicability of the principle of Revenue Neutrality - HELD - the impugned order of assessment insofar as it proceeds on the premise that the exemption on the sales to CSD under the TNGST Act must be confined to that particular enactment is unexceptionable. However, it fails to see that Entry Tax paid on goods is available as set-off even in respect of goods exempt under General Sales Act - The fact that exemption is granted to sale of Schedule goods under the TNGST Act, 1959 does not take away the liability under the General Sales Tax Act. This is in view of the settled principle that exemption pre-supposes liability - the impugned orders of assessment has not dealt with the said aspect and thus stands vitiated for failing to examine/take into account the above factors which has a material being on the issue under consideration - the contention of the petitioner that the entire exercise may be revenue neutral if one takes into account the entitlement to set-off the Entry Tax payable while working out the tax payable under the TNGST Act is relevant – on the issue of Limitation, assuming that the impugned proceedings qualify as assessments of escaped value of scheduled good in which event it would be governed by Section 10 of the Entry Tax Act read with Section 16 of the TNGST Act, 1959. Then applying the exclusion provided under Section 16(5) of the TNGST Act, 1959 the impugned orders of assessment are within period stipulated under Section 10 of the Entry Tax Act read with Section 16 of the TNGST Act, 1959 and thus the plea of the impugned orders being barred by limitation is liable to be rejected - it is open to the Assessing Authority to proceed to make the assessment / reassessment and while doing so, it would also bear in mind the principles with regard to the set off of the entry tax paid while working out the tax payable under the TNGST Act, 1959 and also the principles of Revenue Neutrality, insofar as they may be applicable to the present case - Writ Petitions stand disposed of by remand
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