Concessional sales tax on veneer used in plywood manufacture upheld where Sixth Schedule exclusion did not apply.

Section 3(3) of the Tamil Nadu General Sales Tax Act, 1959 granted concessional levy on sale of goods used in the manufacture of goods for sale, subject only to the exclusions then in force. The later amendment excluding Sixth Schedule goods did not apply to the relevant assessment year, and the provision did not require the sold goods themselves to fall within the First Schedule. On the facts, veneer was commercially distinct from timber and was used in plywood manufacture. The concession was therefore available, and denial of the benefit on the basis of the Sixth Schedule was incorrect.

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Issues: Whether the assessee was entitled to concessional levy under section 3(3) of the Tamil Nadu General Sales Tax Act, 1959 on sale of veneer used in the manufacture of plywood, notwithstanding the departmental view that veneer or timber fell under the Sixth Schedule.

Analysis: Section 3(3), as it stood for the relevant assessment year, granted concessional tax on sale of any goods used in the manufacture of goods for sale, subject to the specified exclusions. The restriction introduced later by amendment, excluding goods falling under the Sixth Schedule, was not applicable to the assessment year in question. The provision did not require the sold goods themselves to fall under the First Schedule, and the relevance of the Sixth Schedule could not be imported to deny the concession. On the facts, the material sold was commercially distinct from timber and was used as veneer in plywood manufacture.

Conclusion: The assessee was entitled to concessional levy under section 3(3), and the denial of the benefit on the basis of the Sixth Schedule was incorrect.

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