Madras High Court held in M/s.Biojenik Engineering (P) Ltd. v. CTO, held that the sale of equipments to educational institutions established by Government attracts lower tax under the Tamil Nadu Value Added Tax (VAT) Act.
Assessee Company in the instant case engaged in the sale of scientific equipments to various educational institutions such as Indian Institute of Technology, etc. has claimed a lower tax rate of tax at 5 percent on the said items. Assessee contended that the supplies being affected to the educational institutions are capital goods and taxable under Schedule II Part B at the rate of 5% as per the amended Commodities list under CTD portal.
But the revenue has denied the claim of the assessee and took a view that since the sales were made to Government will be treated as sales to unregistered dealer and the same is liable for tax at the rate of 14.5 percent. It was said that in such cases where, notifications have been issued under Section 8 (5) of the Central Sales Tax Act, 1956 C/D form is essential and the assessee does not submit any kind of form that specified in the Act. In such circumstances it is impossible to allow the concessional tax rate to the assessee, the department said.
Aggrieved by the assessee filed an appeal before the court.
After considering the rival submissions of both the parties and perusing the available material facts on records Madras High Court Justice T.S.Sivagnanam observed that while analyzing the material facts it is clear that the assessee is a registered dealer of the above said goods to educational institutions and hospitals and in such a situation it cannot be denied of the benefits of concessional rate of tax, on the sales of the above said instruments and equipments in the course of inter-state trade or commerce and it is not necessary for the assessee to produce ‘C’/’D’ Declaration Forms to claim the benefit of concessional rate of tax.
While allowing the writ petition filed by the assessee the court also pointed out that the assessee is eligible for concessional tax rate on the sale of equipments to educational institutions.
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