Exemption for cotton seeds sold for sowing purpose required fresh consideration under the sales tax Schedule, with hearing

Cotton seeds sold for sowing purpose had to be examined under the relevant Schedule entry to the Tamil Nadu General Sales Tax Act, 1959, because the assessment treated them as oil seeds while the assessee claimed exemption as certified seeds for sowing. The court noted that the impugned clarification and assessment had not properly applied the Schedule entry governing the transaction. As the respondents did not oppose reconsideration on merits, the order was set aside and the matter was remitted for fresh decision after independent application of the Schedule and an opportunity of hearing to the assessee.

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Issues: Whether the clarification refusing exemption and the consequential assessment treating cotton seeds for sowing purpose as oil seeds were sustainable, and whether the matter required remand for fresh consideration.

Analysis: The dispute turned on the proper application of the Schedule to the Tamil Nadu General Sales Tax Act, 1959 to cotton seeds sold for sowing purpose. The assessment had proceeded by treating the goods as oil seeds under the relevant entry, while the petitioner maintained that the goods were certified seeds for sowing and therefore attracted the exemption entry. The record disclosed that the impugned action had not properly engaged with the Schedule entry governing the transaction. The respondents did not dispute that the matter could be reconsidered on merits, and fresh examination with due opportunity of hearing was appropriate.

Conclusion: The impugned order was set aside and the matter was remitted for fresh decision after independently applying the Schedule to the Tamil Nadu General Sales Tax Act, 1959 and affording the petitioner an opportunity of hearing.

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