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Judgment
61 paragraphs · 1,099 wordsR. Sudhakar, J.—This Writ Petition is filed praying to issue a Writ of Certiorarified Mandamus, calling for the records of the first respondent
in A.C.A.A.R.59/2012-13 D. Dis. Acts Cell II/29358/2012 dated 26.10.2012, quash the same and direct the first respondent to reconsider the
issue after furnishing the petitioner a copy of the materials, particulars furnished by the second respondent to the first respondent and affording a
personal hearing to the petitioner as contemplated u/s 48-A of the Tamil Nadu Value Added Tax Act, 2006 read with Rule 12-A of the Tamil
Nadu Value Added Tax Rules, 2007. Heard Mr. S.N. Kirubanandam, learned counsel appearing for the petitioner and Mr. Aditya Reddy,
learned Government Advocate (Tax) appearing for the respondents.
Petitioner made an application for Clarification/Advance Ruling on 31.8.2012 in terms of Section 48-A of the Tamil Nadu Value Added Tax
Act, 2006 (in short TNVAT Act, 2006). According to the petitioner, the goods in question is Chemically Cross Linked Polyethylene Sheet
Insulation Material, falling under First Schedule, Part-B, Serial No. 69, which is described as Insulators Commodity Code No. 2069. If the goods
are classified under the First Schedule, it will be taxable at the rate of 5%. The said application was received and considered and order came to be
passed by the first respondent Authority for Clarification and Advance Ruling by proceedings No. A.C.A.A.R.59/2012-13 dated 26.10.2012.
The first respondent authority came to hold as follows:-
There is no specific Entry for Chemically cross linked polyethylene Sheet under any of the Schedules.
Entry 69 of Part C of the First Schedule to the Act reads as follows:
Any other goods, not specified in any of the Schedules.
Chemically cross linked polyethylene sheet fits into the description given under Entry 69 of Part C of the First Schedule to the Act.
The clarification, therefore, is that chemically cross linked polyethylene sheet is an unclassified item taxable at 14.5% under Entry 69 of Part C
of the First Schedule to the TNVAT Act, 2006.
To come to this conclusion, reasons have been given in paras 4 and 5 which reads as follows:-
The dealer has stated that ''INSU Shield is a closed all chemically cross linked polyethylene material. The closed cell structure of the product
prevents moisture ingress, and the chemical composition and the density of the material makes it suitable for thermal insulation application in air-
conditioning and factory sheds under roofing areas. The product is manufactured with or without facings material such as aluminium foil and UV
film, which serve as vapour barriers providing ease of application and sealing of joints for stable performance.
The product is polyethylene sheet of various thickness for diversified uses. The product cannot be considered solely an Insulating material as
claimed by the dealers.
The primary plea taken by the petitioner is that the proviso to Section 48-A of TNVAT Act, 2006 speaks about the rejection of the application.
It provides to give the applicant reasonable opportunity of being heard and where the application is rejected it should be supported by reasons.
Section 48-A of TNVAT Act, 2006 and its proviso reads as follows:
48-A. Clarification and Advance Ruling (1) The Government may constitute a State Level Authority for Clarification and Advance Ruling,
(hereinafter in this section, referred to as the Authority) comprising of the Commissioner of Commercial Taxes and two Additional Commissioners
to clarify, any point concerning the rate of tax, on an application by a registered dealer:
Provided that no such application shall be entertained unless it is accompanied by proof of payment of such fee, paid in such manner, as may be
prescribed.
(2) No application shall be entertained where the question raised in the application:-
(i) is already pending before any appellate or revising authority of the department or Appellate Tribunal or any Court; or
(ii) relates to an issue which is designed apparently for avoidance of tax:
Provided that no application shall be rejected under this sub-section without giving the applicant a reasonable opportunity of being heard and
where the application is rejected, reasons for such rejection, shall be recorded in the order.
(emphasis supplied)
Petitioner also relies upon the Rule 12-A and its proviso, TNVAT Rules, 2007 which reads as follows:-
12-A Authority for Clarification and Advance Ruling.-(1) Every application u/s 48-A by a registered dealer, seeking clarification on any point
concerning the rate of tax, shall be made to the Authority in Form VV in quadruplicate and shall be accompanied by a crossed banker''s cheque in
favour of State Bank of India or crossed demand draft or pay order of a Bank in support of having paid a sum of rupees one thousand only in
favour of the Commissioner of Commercial Taxes, Chennai.
(2) On receipt of any such application, the Authority shall cause a copy thereof to be forwarded to the assessing or registering authority concerned
and call for any information or records.
(3) The Authority may, after examining such application and the records called for, by order, either admit or reject the application within thirty days
from the date of receipt of the application:
Provided that no application shall be rejected without giving the applicant a reasonable opportunity of being heard and the reasons for rejection
shall be recorded in the order.
(emphasis supplied)
The proviso to Rule 12-A of the TNVAT Rules, 2007 speaks about the manner in which the application should be considered. It also speaks that
no application shall be rejected without giving the applicant a reasonable opportunity of being heard and the reasons for rejection shall be recorded
in the order, which is in consonance with Section 48-A of the TNVAT Act, 2006.
Admittedly, the application filed by the petitioner seeking clarification on the product has been rejected holding that it falls under a different
category, namely, Part-C of the First Schedule to the TNVAT Act, 2006. Therefore, before rejecting the petitioner''s application, the proviso to
Section 48-A of the TNVAT Act, 2006 and Rule 12-A of the TNVAT Rules, 2007 necessarily have to be followed. Admittedly, in this case, no
opportunity of personal hearing was given to the petitioner. In such view of the matter, the impugned order is liable to be set aside.
In view of the above, the impugned order is set aside and the matter is remitted back to the first respondent authority for fresh consideration
after giving reasonable opportunity to the petitioner in accordance with law. The Writ Petition is allowed by way of remand as above. No costs.
Consequently, connected miscellaneous petitions are closed.