JAYAM & CO. versus ASSISTANT COMMISSIONER & ANR.

JAYAM & CO. versus ASSISTANT COMMISSIONER & ANR.

Section 19(20) of the Tamil Nadu Value Added Tax Act, 2006 introducing reversal of ITC when goods are sold at a lesser price than purchased is constitutionally valid as a legislative concession. However, giving this provision retrospective effect from January 01, 2007 unjustifiably takes away the vested rights of dealers for the period between January 01, 2007 and August 19, 2010, and to that extent, the retrospective operation is unconstitutional and struck down.

Parties
Appellant: Jayam & Co.; Respondent: Assistant Commissioner & Anr.
Jurisdiction
India
Judgment Date
05 August 2016
Procedural Posture
Civil Appeal / Appeal From High Court Judgment Dated 17.07.2013
Outcome
Appeals partly allowed
Legal Topics
Input Tax Credit (itc), Retrospectivity of Legislation, Constitutionality of Tax Statutes
Tax Law Constitutional Law Input Tax Credit (itc) Retrospectivity of Legislation Constitutionality of Tax Statutes

Case Brief

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Parties

Jayam & Co.

Appellant

Assistant Commissioner & Anr.

Respondent

Procedural Posture

Civil Appeal / Appeal From High Court Judgment Dated 17.07.2013

Legal Issues

  1. 1 Whether sub-section (20) of Section 19 of the Tamil Nadu Value Added Tax Act, 2006 could be given retrospective effect from January 01, 2007
  2. 2 Whether the amendment violates Article 14 and 19(1)(g) of the Constitution by taking away vested rights of dealers

Ratio Decidendi

Section 19(20) of the Tamil Nadu Value Added Tax Act, 2006 introducing reversal of ITC when goods are sold at a lesser price than purchased is constitutionally valid as a legislative concession. However, giving this provision retrospective effect from January 01, 2007 unjustifiably takes away the vested rights of dealers for the period between January 01, 2007 and August 19, 2010, and to that extent, the retrospective operation is unconstitutional and struck down.

Court Disposition

Appeals partly allowed

Orders

  • Constitutionality of s.19(20) of the Tamil Nadu Value Added Tax Act, 2006 is upheld prospectively.
  • Amendment giving retrospective effect from January 01, 2007 to section 19(20) is struck down.