Gupta Hair Products Pvt. Ltd. vs The Joint Commissioner/Executive Officer

T.S. Sivagnanam, J.—The petitioner company is a registered Dealer under the provisions of Andhra Pradesh Value Added Tax Act and Central Sales Tax Act at Andhra Pradesh. The petitioner company has a branch in Chennai and they have registered under the Tamil Nadu Value Added Tax Act, 2006, Central Sales Tax under the Tambaram Assessment Circle. Since the Assistant Commissioner Commercial Taxes Department, Tambaram Assessment Circle, Tambaram, Chennai, is a proper and necessary party to the petition, this Court suo motu impleaded the said authority as 3rd respondent in this writ petition.

The petitioner participated in an e-auction conducted by the first respondent. Pursuant to the auction Notification dated 20.06.2014 for the purchase of human hair, the petitioner was declared as a successful bidder and a sale order dated 01.08.2014 was issued in favour of the petitioner. The petitioner paid the sale value for the human hair purchased by them and the dispute is with regard to the claim for Sales Tax at 5%. To safeguard the interest of the second respondent Temple, the petitioner has given Bank guarantee for the said amount and goods have been released.

The learned counsel for the petitioner submitted that 75% of the goods purchased have been exported and remaining is under the process of cleaning and to be shortly exported. She further submitted that the sale effected by the petitioner would clearly fall within the provisions of Section 5(3) of the Central Sales Tax Act and therefore, exempted from tax. In this regard, the learned counsel relied upon the decision of the Honourable Constitution Bench of the Supreme Court, in the case of State of Karnataka Vs. Azad Coach Builders Pvt. Ltd. and Another, . The petitioner has addressed a letter dated 04.08.2014 to the second respondent stating that they are exempted from the payment of Sales Tax under Section 5(3) of the Central Sales Tax Act and the question of payment of Sales Tax does not arise and they also undertook to produce Form-H against the said purchase, if the second respondent provides TIN number. Further, along with the representation dated 05.08.2014, addressed to the second respondent, the export order dated 13.05.2014 and 15.05.2014 was enclosed.

The learned counsel appearing for the petitioner submitted that the petitioner has addressed a letter to the 3rd respondent, namely, the Assistant Commissioner, Commercial Taxes Department, Tambaram Assessment Circle, Chennai, on 09.10.2014, requesting for the issuance of Form-H to enable them to produce the same to the second respondent-Temple. The said request is still pending before the said Authority. The learned counsel for the petitioner further submitted that if sufficient time is granted, the petitioner would be in a position to produce Form-H, consequently, the demand of Sales Tax from the petitioner does not arise. Furthermore, the learned counsel for the petitioner submitted that the interest of the second respondent is also safeguarded since the Bank Guarantee has been furnished by the petitioner. The petitioner undertakes to keep the Bank Guarantee alive till the dispute is resolved.

In the result, the writ petition is disposed of by directing the 3rd respondent to consider the petitioner''s representation dated 09.10.2014 on merits and in accordance with law and appropriate orders shall be passed by the 3rd respondent if condition is satisfied, so as to enable the petitioner to produce Form-H before the second respondent. Such order shall be passed by the 3rd respondent, within a period of eight weeks from the date of receipt of a copy of this order. Till the matter is finally resolved, the petitioner shall keep the Bank Guarantee alive. The petitioner is directed to enclose the letter dated 09.10.2014 along with the copy of this order and forward the same to the 3rd respondent. No costs. Consequently, connected miscellaneous petition is closed.