(Prayer: Writ Petition filed under Article 226 of the Constitution of India praying for the issue of a Writ of Certiorari to call for the records of the second respondent pertaining to the order dated 28.04.2003 made in O.P.No.258 of 2003 and to quash the same as illegal.)
CHITRA VENKATARAMAN, J.
The Revenue has come on revision as against the order of the Tamil Nadu Taxation Special Tribunal, Chennai, dated 28.04.2003 made in O.P.No.258 of 2003, seeking to quash the same as illegal.
2. For the assessment year 2001-2002, the assessee reported the taxable turnover at at 30,25,02,122/-. The taxable turnover upto 31.10.2001 was Rs.12,14,60,758/-. As per Section 2(1)(aa) of the Tamil Nadu Additional Sales Tax Act, 1970, as it stood during the period from 01.04.1998 to 31.10.2001, the dealer was liable to pay additional sales tax under the Tamil Nadu Additional Sales Tax Act, if the taxable turnover of the assessee exceeded Rs.25 crores. Section 2(1)(aa) of the Tamil Nadu Additional Sales Tax Act was amended by the Tamil Nadu Act 13 of 2001 with effect from 1.11.2001, that the liability for the purpose of additional sales tax was reduced to Rs.10 crores. Thus, on and from 1.11.2001, the liability under the Tamil Nadu Additional Sales Tax Act stood attracted on a dealer crossing the taxable turnover of Rs.10 crores. In these circumstances, the assessee's liability under the Tamil Nadu Additional Sales Tax Act for the Assessment Year 2001-02 fell for consideration under the unamended provision as it prevailed upto 31.10.2001 and the amended provision relevant to the period 1.11.2001 to 31.3.2002. As the assessee had a taxable turnover for the assessment year 2001-02 above Rs.25 crores, as per the amended Act, the chargeability to additional tax stood attracted to be assessed at the applicable rates during the relevant point of time. In these circumstances, the assessee was served with a notice dated 27.1.2003 and the assessee was called upon to pay the additional sales tax. The notice stated that on the turnover for the entire assessment year 2001-02 at Rs.30,49,38,275/-, the assessee had paid Rs.18,10,413/- as against Rs.45,74,074/- and that, as the assessee had a turnover of more than Rs.10 crores for the assessment year 2001-02, i.e., from 1.4.2001 to 31.3.2002, the liability stood attracted at the tax rate at 1.5%. The assessee disputed the notice issued on 27.01.2003 that the taxable turnover during the period 01.04.2001 to 30.10.2001 was Rs.12,14,60,758/-, which was less than Rs.25 crores. As per the law existing during that period, the liability to pay the additional sales tax arose only when the taxable turnover was more than Rs.25 crores. Hence, the liability to pay additional sales tax for the period from 1.4.2001 to 31.10.2001 did not arise. On an Original Petition filed challenging the notice, the Tamil Nadu Taxation Special Tribunal, by its order dated 28.04.2003, upheld the contention of the assessee and held that for the period 1.4.2001 to 31.10.2001, the turnover was to be assessed as per Act 23 of 1998, that only when the taxable turnover exceeded Rs.25 crores, that the liability arose for payment of additional tax for the period 1.4.2001 to 31.10.2001; that as per the amendment made under Act 13 of 2001, effective from 1.4.2001, when the taxable turnover, for the purposes of liability, was fixed at Rs.10 crores, and the assessee's turnover did not cross Rs.25 crores, the applicable rate of tax at 1% was to be applied. Following the order of the Special Tribunal, the Deputy Commercial Tax Officer levied sales tax only for the period 1.11.2001 to 31.03.2002. The Revenue has come on appeal before this Court, challenging the order of the Tamil Nadu Taxation Special Tribunal.
3. The contention now raised by the Revenue is that even though the amendment made under Tamil Nadu Act 13 of 2001 reduced the taxable turnover to Rs.10 crores from Rs.25 crores, the liability for the period upto the pre-amendment period would not get wiped out, as the taxable turnover during the period upto 31.10.2001 exceeded Rs.10 crores and the liability to additional tax has to be seen with reference to the taxable turnover for the entire year and not for a fraction of the year. Hence, the order of the Tribunal that the liability would arise only if the taxable turnover exceeded Rs.25 crores for the period 1.4.2001 to 31.10.2001, is incorrect.
4. Heard the learned counsel appearing for the Revenue and the assessee and perused the material on record.
5. The issue as regards the amendment made during the mid financial year resulting in two different taxable turnover to attract the liability under the Tamil Nadu Additional Sales Tax Act, 1970, came up for consideration in T.C.No.488 of 2006 dated 8.7.2010. In the said decision, this Court had an occasion to consider the provisions of Section 2(1)(a) of the Tamil Nadu Additional Sales Tax Act that existed prior to the amendment under Act 31 of 1996. From 01.04.1996 to 31.7.1996 under the unamended provision, the liability to additional sales tax was fixed when the taxable turnover crossed Rs.10 lakhs. Under the amendment made under Act 31 of 1996 which amended Section 2(1)(a) and 2(1)(aa) with effect from 1.8.1996, the taxable turnover was fixed at Rs.100 crores and above for the purpose of attracting the liability to additional sales tax. The assessee contended therein that the liability to additional sales tax would arise only if and when the taxable turnover exceeded Rs.100 crores in the assessment year. As the taxable turnover did not exceed Rs.100 crores, there would be no liability at all. This Court referred to the decision of the Tamil Nadu Taxation Special Tribunal reported in  110 STC 313 (Siemens Limited Vs. State of Tamil Nadu), holding that the taxable turnover for the purpose of the Act, as applicable to all the dealers irrespective of the dealer having branches outside the State, would be Rs.100 crores and above. Thus, after the above decision, only if the taxable turnover of a dealer, including the principal, selling or buying through agents, exceeded Rs.100 crores, that the liability under the Act stood attracted. Thus this Court held:
" In other words, if in the very same financial year, different rates are to be worked out by virtue of prescription of such different rates, due to statutory amendments, the only exercise to be carried out would be to ascertain the period for which the different rates of tax are to be worked out. In our considered view, such prescription of different rates in that financial year will not in any way affect the very basis of the liability created. Once we steer clear of the said position, we do not find hurdle at all in bifurcating the financial year in the case of any assessee, while applying the un-amended section 2(1)(a) upto 31.7.1996 and the liability after its amendment on and after 1.8.1996, for the purpose of calculating the additional sales tax liability. "
This Court pointed out that after the amendment under Act 31 of 1996, the liability to additional sales tax would arise on the assessee reaching the taxable turnover of Rs.100 crores. Even in such a situation, for the period upto 31.7.1996, the liability would have to be worked out as per the provision prevailing upto that date, viz., the unamended Section 2(1)(a), and for the subsequent period covered by amendment, the taxable turnover covering the period 1.8.1996 to 31.3.1997, would go for taxation at the applicable rate. Thus on the facts of the case, this Court pointed out that the taxable turnover for the unamended period upto 31.7.1996 was Rs.24,72,032/- and the taxable turnover for the entire year exceeded Rs.1 crore. As per the unamended law existing upto 31.7.1996, the liability would arise if the taxable turnover for the financial year exceeded Rs.10 lakhs. However, post 1.8.1996, the taxable turnover was fixed at Rs.100 crores and more, to attract the liability. This Court thus pointed out that, for the whole of the financial year, as the taxable turnover did not exceed Rs.100 crores, even though there would not be any liability for the period beyond 31.7.1996, yet, for the period upto 31.7.1996, applying the law available as on that date, the liability was to be worked out at the rate available therein. This Court thus set aside the demand made by the Assessing Officer at 2% as well as the order of the Tribunal.
6. Applying the said decision to the facts of the case herein, the assessee had reported Rs.30,25,02,122/- and upto 31.10.2001, it was Rs.12,14,60,758/-. As per the law that stood relevant to the Assessment Year 2001-02, upto 31.10.2001, the tax liability under the Tamil Nadu Additional Sales Tax Act would arise if the taxable turnover exceeded Rs.25 crores. With effect from 1.11.2001, the liability was attracted when the taxable turnover exceeded Rs.10 crores. As far as the present case is concerned, applying the unamended provision, the assessee is liable to pay sales tax for the pre-amended period as well as for the post-amendment period, as the turnover for the entire year exceeded the taxable limit both under the unamended provision as well as under the amended provision. The Assessing Officer calculated the additional sales tax at the rate of 2% on the taxable turnover for the whole of the year. Having regard to the above, the Tribunal held that for the period 1.4.2001 to 31.10.2001, the turnover has to be assessed when the taxable turnover exceeded Rs.25 crores at 1.5% of the taxable turnover and with effect from 1.11.2001, the slab has to be followed as per the amendment under Act 13 of 2001, when the taxable turnover exceeded Rs.10 crores i.e., at 1% of the taxable turnover and where the taxcable turnover exceeded Rs.25 crores and did not exceed Rs.50 crores, the taxable turnover was assessable at the rate of 1.5% of the taxable turnover. Going by the decision of this Court, ta
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king the entire year's turnover, the liability upto the date of amendment will have to be worked out at the rate prevailing upto the date of the amendment and for the period subsequent to the amendment, the rate prevailing therein. By taking the taxable turnover for the whole year, as the taxable turnover attracted the charge, the necessity to pay the additional sales tax shall be at the relevant rate prevailing as per the unamended law upto the unamended period and post amendment period would be covered by the rate fixed under the amended law. Applying the said decision, the assessee's turnover for the entire year has to be first worked out and upto the cut-off period i.e., upto 31.7.2006, the applicable rate has to be worked out as per the unamended provision and beyond that, for the post-amendment period, the applicable rate under the amended provision has to be arrived at. In the light of the above facts, the writ petition is partly allowed and the order of the Tribunal is set aside, directing the Assessing Officer to work out the liability and pass orders thereon.