TN VAT - Section 19(20) inserted by way of amendment is a provision which is made for first time to detriment of dealers and, therefore, cannot have a retro effect; constitutional validity upheld: SC

As per the illustration, if the discounted price of the vendor is considered then selling price being 95 is more than the discounted purchase price of 90 thereby fulfilling the conditions of section 19(20) of TNVAT Act, 2006. If the vendor has provided a discount of 10 then how is it that VAT was paid on 100 i.e. 10 was considered as VAT and not on 90? It appears that this fact was neither cross checked by the assesse or the lower appellate authority. Further, the Supreme Court stating that the invoice price has to be considered and not the price after discount shows that Judges have limited or no understanding of the business transactions. This case should have been remanded back to the original authority to check the facts and then decided.

santosh hatwar 25/08/2016