2010 (7) TMI 951 - HC - VAT and Sales Tax

Court Upholds Tax Exemption Ruling on Second Sale Appeal

State of Tamil Nadu Versus Meenakshi Asphalts

The court upheld the Tribunal's decision, ruling against the Revenue's appeal regarding the entitlement to tax exemption for a second sale. The court ... - Issues:1. Setting aside the order of remand for verification of place of business and registration of selling dealer.2. Legality of deletion of surcharge and penalty by the Tribunal.Issue 1:The Appellate Assistant Commissioner remitted the matter for liability ascertainment, which the Tribunal set aside based on legal precedents. The key question was whether the respondent was entitled to tax exemption for a second sale. The Revenue argued that since the first sale was not by a registered dealer, the exemption for the second sale should not be allowed. The contention was that the seller's registration was retrospectively canceled, making the purchase by the respondent from an unregistered dealer invalid. The court referred to a previous decision stating that if a sale is taxable and the respondent's sale is a second sale, exemption can be claimed. The court rejected the argument that sales by unregistered dealers are not taxable, emphasizing that all sales by dealers engaged in business are taxable. The court held that if there is a prior sale in the state, subsequent sales cannot be taxed as second sales. As the questions raised were covered by the previous decision, the court upheld the Tribunal's order, ruling against the Revenue's appeal.Issue 2:The court found no grounds to interfere with the Tribunal's decision based on the legal principles established in the previous judgment. As the questions of law raised in the revision petition were directly addressed by the earlier decision, the court dismissed the tax case revision, stating that it failed and no costs were awarded.