Light Roofings Ltd. Vs Tamil Nadu Sales Tax Appellate Tribunal (Madras High Court)
Four writ petitions were filed by Light Roofings Ltd. before the Madras High Court challenging the common order of the Tamil Nadu Sales Tax Appellate Tribunal (STAT) dated 19 February 2008. The dispute concerned whether purchase tax could be levied under Section 7A of the Tamil Nadu General Sales Tax Act, 1959 (TNGST Act), when the seller or vendor had not remitted sales tax due on its transactions.
Background
The petitioner, a manufacturer and seller of asphalt roofing sheets, was registered under the TNGST Act for the assessment years 1993–94 to 1996–97. An inspection conducted by the Enforcement Wing on 21 March 1996 revealed that the petitioner had purchased asphalt from two dealers, Sri Vinayaga Agencies and Sri Mahalakshmi Agencies, who had allegedly not paid sales tax on their sales. The petitioner had, however, used the purchased asphalt to manufacture roofing sheets and paid sales tax on the sale of the finished products, which was not disputed by the department.
The purchase turnover from the two vendors over the four years was as follows:
| Year | Sri Vinayaga Agencies | Sri Mahalakshmi Agencies |
|---|---|---|
| 1993–94 | ₹47,94,594 | ₹1,17,169 |
| 1994–95 | ₹53,09,502 | ₹14,51,801 |
| 1995–96 | ₹46,50,739 | ₹7,85,214 |
| 1996–97 | ₹24,97,505 | ₹16,71,458 |
Proceedings Before Lower Authorities
