1984 (12) TMI 290 - HC - VAT and Sales Tax

Court distinguishes cashewnuts from cashew kernels for tax purposes, upholds assessments under Sales Tax Act. Discretion on appeal delays.

Dinod Cashew Corporation Versus The Deputy Commercial Tax Officer and Another

Dinod Cashew Corporation Versus The Deputy Commercial Tax Officer and Another - [1986] 61 STC 1 (Mad) Issues Involved:1. Whether cashewnut and cashew kernels are the same goods for purposes of section 5(3) of the Central Sales Tax Act, 1956.2. Validity of reopening assessments under section 16 of the Tamil Nadu General Sales Tax Act, 1959.Summary:Issue 1: Whether cashewnut and cashew kernels are the same goods for purposes of section 5(3) of the Central Sales Tax Act, 1956.The primary question was whether cashew kernels exported by the petitioners, which were processed from raw cashewnuts, could be considered the same goods under section 5(3) of the Central Sales Tax Act, 1956. The court examined the process of converting cashewnuts to cashew kernels, involving drying, roasting, shelling, and peeling, which results in a commercially distinct product. The Supreme Court's decision in State of Travancore-Cochin v. Shanmugha Vilas Cashew-nut Factory [1953] 4 STC 205 (SC) was pivotal, where it was held that cashewnuts and cashew kernels are commercially different commodities. The court reaffirmed that the cashewnut and cashew kernel are commercially different articles, thereby denying the benefit of section 5(3) of the Central Act to the petitioners.Issue 2: Validity of reopening assessments under section 16 of the Tamil Nadu General Sales Tax Act, 1959.The petitioners challenged the reopening of assessments under section 16 of the Tamil Nadu General Sales Tax Act, 1959, arguing that the provision treats all cases of reopening alike, whether due to concealment or a change of opinion. The court noted that the constitutional validity of section 16 was not challenged. It held that section 16(1)(a) allows reopening of assessments if any turnover has escaped assessment for any reason within five years. The court cited Yercaud Coffee Curing Works Ltd. v. The State of Tamil Nadu [1977] 40 STC 531, affirming that the power to reassess turnover under section 16 is broad and can be exercised if any part of the turnover has escaped assessment. Consequently, the court found no infirmity in the reassessment proceedings initiated or completed under section 16.As a result, the court dismissed W.P. No. 3968 of 1982 and other related petitions challenging the reopening of assessments or notices issued under section 16. The court also dismissed petitions challenging notices issued by the Joint Commissioner of Commercial Taxes and those challenging original assessments.The court declined to direct the appellate authority to condone delays in filing appeals due to the pendency of writ petitions, stating that it is within the appellate authority's discretion to condone such delays.Costs were awarded in W.P. No. 3968 of 1982, with a counsel fee fixed at Rs. 1,500, while no costs were ordered in the other writ petitions.