Commercial Tax Officer Vs Nac Jewellery (Madras High Court)
Summary: The Madras High Court dismissed the Writ Appeals filed by the Commercial Taxes Department against orders of the Writ Court concerning luxury tax assessments of M/s. Nac Jewellery, an entity engaged in the manufacture and sale of jewellery. The assessments related to the years 2002-03, 2003-04 and 2004-05 and had been challenged on the ground that luxury tax ought not to have been levied on the purchase value of gold, silver and platinum jewellery and precious stones. The assessee had also sought refund of the tax paid.
The appeals comprised WA No. 3457 of 2019, WA No. 3458 of 2019 and WA No. 3472 of 2019, along with connected miscellaneous petitions. The appeals were filed under Clause 15 of the Letters Patent against the order dated 11.12.2009 in WP Nos. 24569 to 24571 of 2009.
Before the Division Bench comprising Dr. Justice Anita Sumanth and Mr. Justice Sunder Mohan, both sides concurred that the issue concerning the levy of luxury tax itself had already been decided against the Revenue in Godfrey Phillips India Ltd. v. State of U.P., (2005) 139 STC 537. The Court reproduced paragraphs 96 to 99 of that judgment. In those paragraphs, the Supreme Court held that Entry 62 of List II did not permit levy of tax on goods or articles and that the expression “luxuries” referred to activities of indulgence, enjoyment or pleasure. The Supreme Court consequently held the impugned legislation seeking to tax luxury goods to be legislatively incompetent. However, following the principles in Somaiya Organics (India) Ltd. vs. State of U.P., (2001) 5 SCC 519, it did not consider it appropriate to permit refund of taxes already paid under the impugned Acts.
