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2012 DIGILAW 1133 (MAD)

State of Tamil Nadu v. Tvl. Sahara Enterprises

2012-03-01

D.MURUGESAN, P.P.S.JANARTHANA RAJA

body2012
Judgment D. MURUGESAN, J. 1. The Tax Case Revisions are at the instance of the Revenue questioning the order of the Sales Tax Appellate Tribunal, dismissing the appeals filed by the Revenue filed against the order of the Appellate Assistant Commissioner. The revenue has raised the following questions of law:- "1. Whether in the facts and circumstances of the case, the Tribunal has erred in confirming the finding of the Appellate Assistant Commissioner (CT) that the man made fabrics imported would be eligible for exemption under entry 8(i) of the 3rd schedule to the Tamil Nadu General Sales Tax, 1959 ? 2. Whether in the facts and circumstances of the case, the consequent deletion of penalty by the Tribunal is valid in law? 2. The respondent/assessee is a dealer in re-inforcement tapes, woven fabrics, etc. and in respect of assessment year 1994-95, they have reported a total and taxable turnover of Rs.1,59,090/- and Rs.Nil respectively and for the assessment year 1995-96, Rs.20,97,602/- and Rs.2,750/- respectively, in Form A1 returns under the Tamil Nadu General Sales Tax Act. The claim of exemption for woven fabrics imported from Dubai and South Korea was considered and negatived by the assessing officer. On a challenge to the assessment orders, the Appellate Assistant Commissioner agreed with the claim of the assessee for exemption and consequently allowed the appeals filed by the assessee. The challenge to the said orders by the Revenue was not accepted by the Tribunal and therefore, the Revenue is before this Court, raising the questions of law referred above. 3. The issue raised by the Revenue is not res integra. In fact, when a similar issue arose before this Court relating to the imported sugar, this Court having referred to Section 14 of the Central Sales Tax Act, Section 4 and Second Schedule of the Tamil Nadu General Sales Tax Act, found that in the absence of any specific entry in the Second Schedule, the declared goods, viz., Sugar, must be exempted from payment of tax and the question of distinction as to whether indigenous manufactured sugar or imported sugar makes no difference for the purpose of exemption. 4. 4. Mr.Sivaraman, learned Special Government Pleader, would submit that inasmuch as the residuary entry 10 in the Second Schedule refers to woven fabrics of wool (produced or manufactured in India) only the tax at the rate of 4% is permissible and no exemption can be granted. 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. After importation, the goods enter into the domestic stream and the interest of the customer would be adversely affected, if the imported goods were tobe taxed at a 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. 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 from 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.