The State Of Tamil Nadu v. Tvl.Oluympic Offset Printers

IN THE HIGH COURT OF JUDICATURE AT MADRAS

DATED: 18.12.2017

CORAM:

THE HON'BLE MR.JUSTICE S.MANIKUMAR AND THE HON'BLE MR.JUSTICE R. PONGIAPPAN Tax Case (Revision).No.81 of 2017 The State of Tamil Nadu rep. By the Joint Commissioner (CT) Chennai (North) Division, Chennai-6.

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Petitioner/Respondent ..Vs..

Tvl.Olympic Offset Printers, No.24, Anderson Street, Chennai - 600 001 ... Respondent/Appellant Tax Case Revision filed under Section 38 of the TNGST Act, 1959 against the order of the Tamil Nadu Sales Tax Appellate Tribunal (Additional Bench), Chennai, dated 12.11.2010 and passed in T.A.171 of 2005. Against the order of the Appellate Assistant Commissioner(CT)-II, Chennai City dated 31/05/2004 and made in AP.No.AP.8/2004 and against the order of the Commercial Tax officer Loansquare-II Assessment Circle, Chennai-108 dated 28/11/2003 and made in TNGST/0160281/2001-2002. For petitioner :

Mr.S.Kanmani Annamalai Spl. Government Pleader (Taxes) For Respondents :

Mr.S.Ramanathan

ORDER

(Order of the Court was made by S.MANIKUMAR, J) Instant Tax Case (Revision) is filed against the order of the Tamil Nadu Sales Tax Appellate Tribunal (Additional Bench), Chennai dated 12.11.2010 made in T.A.No.171 of 2005.

2. Short facts leading to the filing of the appeal are that the respondent Tvl.Olympic Offset Printers, dealers in plastic reported a total and taxable turnover of Rs.3,36,91,521/- and Rs.64,69,092/- for the assessment year 2001-2002 under the Tamil Nadu General Sales Tax Act, 1959. Their place of business was inspected by Enforcement Wing Officials on 07.05.2001 and besides noticing defects in the maintenance of accounts, certain

incriminating records were also recovered at the time of inspection. Based on the result of inspection, the assessing authority assessed the respondent on a total and taxable turnover of Rs.3,22,75,084/- and Rs.81,95,015/-, respectively, in proceedings dated 28.11.2003. Penalty of Rs.55,034/- was also imposed under Section 12(3)(b) of the Act.

3. Aggrieved by the said proceedings, the Appellant preferred an appeal before the Appellate Assistant Commissioner (CT)-II, Chennai. The first appellate authority sustained the assessment made on the turnover of Rs.4,85,868/- at 1% under Section 3(4) of Tamil Nadu General Sales Tax Act, 1959. Assessment on a turnover of Rs.2,10,327/- at 8%, Rs.37,722/- at 4% and Rs.33,098/- at 11% was also sustained, being the equal time addition, based on the incriminating records recovered, at the time of inspection. Appellate Assistant Commissioner (CT)- II, Chennai, set aside the deleted assessment made on the rest of the disputed turnover. Consequent on the above modification of the assessment, penalty was also set aside and deleted.

4. Challenging the orders of the Appellate Assistant Commissioner (CT), the respondent had preferred appeal in T.A. No.171 of 2005 before Tamil Nadu Sales Tax Appellate Tribunal (AB), Chennai. Following the decision of this Court in Tube Investment of India Ltd., v. State of Tamil Nadu reported in [2010] 36 VST 67 (Mad.), wherein it was held that "export is also a sale as contemplated in the first part of section 3(4) of the Tamil Nadu General Sales Tax Act, 1959 and that purchase turnover of raw materials by issue of Form XVII declaration availing concessional rate of tax under Section 3(3) of the Tamil Nadu General Sales Tax Act, 1959 corresponding to the export of manufactured goods could not be assessed to tax under Section 3(4) of the Tamil Nadu General Sales Tax Act, 1959", the tribunal, by order dated 12.11.2010, allowed the appeal filed by the respondent. State has filed the instant Tax Case (R), on the following substantial questions of law.

"1. Whether the order of the Appellate Tribunal is correct in interpreting the expression "does not sell the goods so manufactured "occurring in sub Section

(4) of Section 3 of the Tamil Nadu General Sales Tax Act, 1959 as including not only intra state but also export sale?

2. Whether the Appellate Tribunal is correct in invoking the principle of situs as envisaged in explanation 3(a) to Section 2(n) of the Tamil Nadu General Sales Tax Act, 1959 for the purpose of interpretation of the expression "does not sell the goods so manufactured" as contained in sub Section (4) of Section 3 of the Act so as to bring it within the

ambit of the said explanation?

3. Whether the Appellate Tribunal is legally correct in distinguishing the judgment of Hon'ble Supreme Court in the case of State of Karnataka vs. B.M.Ashraf & Co. reported in 107 STC 571 wherein it was held that a sale deemed to be in the course of export under Section 5(3) of the Central Sales Tax Act, 1956 cannot be regarded as an interstate sale?

4. Whether the Appellate Tribunal is correct in construing that the levy of tax attracted under Section 3(4) of the Act in the event of export sale of the manufactured goods as being a direct levy on the export sale itself and thus contravening Article 286 of the Constitution?

5. Whether the Appellate Tribunal is correct in placing a construction on the expression "in any other manner" occurring under sub Section (4) of Section 3 of the Tamil Nadu General Sales Tax Act, 1959 would not include export sale within its ambit?

6. Whether the Appellate Tribunal has failed to appreciate that sections 3(3) and 3(4) of the Tamil Nadu General Sales Tax Act, 1959 are not designed as charging provisions as evident from the non-obstante clause occurring at the beginning of Section 3(3) of the said Act?

7. Whether the Appellate Tribunal has totally failed to consider that Tamil Nadu General Sales Tax Act, 1959 was enacted to levy tax on sales or purchases within the State of Tamil Nadu alone as evident from the pre-factory explanation to the said Act?"

5. Earlier on similar set of facts and substantial questions of law, following the decision of this Court in Tube Investment of India Ltd., v. State of Tamil Nadu, reported in [2010] 36 VST 67 (Mad.), and other similar cases, we dismissed Tax Case Revision No.47 of 2017, filed by the State, at the admission stage itself.

6. As the instant Tax Case (Revision) is similar, following the decision in Tube Investment of India Ltd., v. State of Tamil Nadu, reported in [2010] 36 VST 67 (Mad.), the instant Tax Case (Revision), is dismissed. Substantial questions of law are answered against the Revenue. No Costs.

Sd/- Assistant Registrar(CS VI) //True Copy// Sub Assistant Registrar ars To 1.The Tamil Nadu Sales Tax Appellate Tribunal (Additional Bench) 2.The Appellate Assistant Commissioner (CT)-II Chennai City.

3.The Commercial Tax Officer Loansquare-II Assessment Circle Chennai +1 cc to the Spl Government Pleader (Taxes) sr 90368 +1 cc to Mr.S.Ramanathan Advocate sr 89980 Tax Case (Revision).No.81 of 2017 kk(co) aa17/01/2018