Kosei Minda Aluminum Company Private Limited Vs Principal Commissioner of Commercial Taxes (Madras High Court)
The Madras High Court dismissed a writ petition challenging an assessment order dated 29.03.2023, which imposed VAT at 14.5% on inter-State sales effected without furnishing C-Forms. The petitioner contended that the assessing authority had wrongly relied on an advance ruling and argued that, following the amendment to Section 8 of the Central Sales Tax Act, 1956, the applicable rate should be the rate prescribed for capital goods under the Tamil Nadu Value Added Tax Act, 2006 (TNVAT Act), namely 5%. It was submitted that the goods sold, namely moulds and dies, qualified as capital goods under Entry 5 of Part-B of the First Schedule to the TNVAT Act.
The State relied on the Division Bench judgment in Schwing Stetter (India) Pvt. Ltd., contending that goods qualify as capital goods under Section 2(11) of the TNVAT Act only if two conditions are fulfilled: first, the goods must fall within clauses (a) to (g) of the definition of capital goods, and second, they must be used within the State for manufacture, processing or other specified purposes. The State pointed out that the petitioner admitted that the moulds and dies were not used within the State and therefore did not satisfy the statutory definition of capital goods.
