Crystal Fleet Marketing v. The Commissoner Of Commercial

IN THE HIGH COURT OF JUDICATURE AT MADRAS

DATED : 15.12.2017

CORAM

THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAM W.P.Nos.15276 & 15277 of 2007 and M.P.No.1 of 2007 Crystal Fleet Marketing, rep. by its Proprietrix, R.Padmini, 'Arun Flats', No.6, Second Main Road, CIT Nagar, Nandanam, Chennai-600 035.

...Petitioner in both W.Ps.

Vs.

1.The Commissioner of Commercial Taxes, Ezhilagam, Chepauk, Chennai-600 005.

2.The Commercial Tax Officer, Nandanam Assessment Circle, 46, Greenways Road, Chennai-600 028.

...Respondents in both W.Ps.

Prayer in W.P.No.15276 of 2007 : Petition filed under Article 226 of the Constitution of India praying for issuance of Writ of Certiorarified Mandamus, to call for the records on the files of the first respondent in L.Dis.Acts Cell II/60154/2006, dated 19.01.2007 and to quash the same while directing the first respondent to pass orders on merits on the application dated 'nil' presented on 30.10.2006 by the petitioners under Section 28-A of the Act.

Prayer in W.P.No.15277 of 2007 : Petition filed under Article 226 of the Constitution of India praying for issuance of Writ of Certiorari, to call for the records on the files of the first respondent in Lr.No.D.Dis.Acts Cell II/8763/06, dated 17.05.2006 and to quash the same.

For Petitioner :

Mr.K.A.Parthasarathy for Mr.N. Inbarajan, For Respondents :

Mr.S.Kanmani Annamalai, Additional Government Pleader

C O M M O N O R D E R In these two writ petitions, the petitioner has challenged the clarification issued by the respondent under Section 28A of the Tamil Nadu General Sales Tax Act, 1959. The legal issue, which is relatable to the clarification issued by the Commissioner was considered by the Hon'ble Division Bench of this Court in the case of The State of Tamil Nadu v. Tvl.Sahara Enterprises in Tax Case (Revision) Nos.388 of 2011 and 1071 of 2006 dated 01.03.2012. In the said case, the Hon'ble Division Bench after taking into consideration the judgment in the case of Indian Sugar & General Industry Export Import Corporation Ltd., v. Commercial Tax Officer and others reported in (2002) 127 STC 339, dismissed the tax case revision filed by the revenue. The operative portion of the order reads as follows: "5.

The above submission, in our view, must fail, as the said entry relates to woven fabrics of wool, whereas in the given case, the assessee had imported woven tapes, synthetic lining materials polyester printed fabrics etc., which are not woollen fabrics. Hence, in the absence of any entry in the Second Schedule relating to the goods in question, and admittedly the goods in question are declared goods in terms of Section 14 clause (vii) wherein it is stated that man made fabrics is covered under heading Nos.54.08, 54.09, 54.10, 54.11, 54.12, 55.07, 55.08, 55.09, 55.10, 55.11, 55.12, 58.01, 58.02, 58.03, 58.04, 58.05, 58.06, 59.01, 59.02, 59.03, 59.05, 59.06 and 60.

01 of the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), which clause does not make any difference between the man made fabrics produced or manufactured in India or imported. The judgment in Indian Sugar & General Industry Export Import Corporation Ltd., v. Commercial Tax Officer and others, (2002) 127 STC 339, squarely applies to the present case and in that, this Court has observed in paragraphs 26 and 31 as follows:- "26.On principle also there is no reason for making a distinction between indigenous and imported goods, as long as the goods are considered to be important in inter-State trade and commerce.

higher rate, exceeding the rate at which, the goods of similar description manufactured in India is subject. The object of the declaration is to promote the interest of the consumer and to ensure the smooth flow of inter-State trade and commerce.

..............

31.In the anxiety to grant exemption to sugar produced or manufactured domestically the reference to sugar manufactured in a factory had been completely omitted in the second Schedule, which refers only to khandsari sugar and sugar manufactured without the aid of power. The assumption made by the revenue that by limiting the exemption to sugar manufactured or produced in India, sugar imported prom outside would automatically be subjected to tax is a wholly erroneous assumption. Without specifying the rate and stage of levy, imported sugar could not be subjected to tax."

6.The learned Special Government Pleader would also, placing reliance on the judgment of this Court in Vardhaman Trade Links v. Tamil Nadu Taxation Special Tribunal and Others, (2008) 14 VST 495 (Mad), contend that in any case, the goods in question are declared goods and therefore, liable to be taxed at 4%. We have gone through the said judgment. It cannot be said that the said judgment has laid down a law that as in all cases, uniform tax of 4% would be levied in case of declared goods, particularly in that case, this Court was considering a tax levy at 20% under the State Act. Moreover, though a reference is made to the judgment of this Court in (2002) 127 STC 339, referred supra, there is no detailed discussion on that and the Division Bench has not disagreed with the views of the said judgment.

Further, in that case, there was also no claim of exemption, as in the present case. 7.For the above reasons, we are not inclined to interfere with the order of the Tribunal and both the questions are answered against the Revenue and in favour of the assessee. The Tax Case Revisions are dismissed accordingly. No costs."

2.Since the above decision holds the field as on date, the clarification issued by the respondent-Commissioner has to be revised, in tune with the law laid down by the Hon'ble Division

Bench in the aforesaid decision. The writ petitions are, accordingly, allowed, the impugned clarification is set aside and the matter is remanded to the first respondent for fresh consideration, who shall issue appropriate clarification on the lines of the Hon'ble Division Bench referred supra. No costs. Consequently, connected miscellaneous petition is closed. Sd/- Assistant Registrar(CS-VI) //True Copy// Sub Assistant Registrar abr To 1.The Commissioner of Commercial Taxes, Ezhilagam, Chepauk, Chennai-600 005.

2.The Commercial Tax Officer, Nandanam Assessment Circle, 46, Greenways Road, Chennai-600 028.

+ 1 cc to Mr. N. Inbarajan, Advocate Sr.89835 + 1 cc to the Special Government Pleader Sr.90004 W.P.Nos.15276 & 15277 of 2007 (CS-VI) EU(17/01/2018)