Binding precedent on dyeing and processing job work sustained the sales tax levy, while belated fresh questions were disallowed.

The Madras HC held that an assessee could not introduce fresh substantial questions of law in the State's revision after the Supreme Court had granted liberty to pursue additional queries before the appropriate forum, as that liberty had to be exercised before the assessing authority and not belatedly. It further held that the levy under Section 3-B of the Tamil Nadu General Sales Tax Act, 1959 on job work of dyeing and processing was covered by the Court's earlier binding decision on identical facts and the same works contract issue. The Tribunal's order was set aside, and the tax levy was sustained in favour of the State.

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Issues: (i) Whether the assessee could, after dismissal of its SLP as withdrawn with liberty to raise additional queries before the appropriate forum, raise fresh substantial questions of law in the revision filed by the State. (ii) Whether the levy under Section 3-B of the Tamil Nadu General Sales Tax Act, 1959 on the job work of dyeing and processing was covered by the earlier decision of the Court.

Issue (i): Whether the assessee could, after dismissal of its SLP as withdrawn with liberty to raise additional queries before the appropriate forum, raise fresh substantial questions of law in the revision filed by the State.

Analysis: The earlier order of the Supreme Court granted liberty to raise additional queries before the appropriate forum, which meant that any such objection had to be pursued before the assessing authority and not belatedly introduced in the revision filed by the State. The assessee did not raise the queries for several years despite that liberty, and the attempt to raise them at the revision stage was held to be impermissible.

Conclusion: The assessee was not permitted to raise the fresh substantial questions of law in the State's revision proceedings.

Issue (ii): Whether the levy under Section 3-B of the Tamil Nadu General Sales Tax Act, 1959 on the job work of dyeing and processing was covered by the earlier decision of the Court.

Analysis: The dispute was treated as covered by the earlier common decision of the Court on identical facts and the same legal question regarding transfer of property in goods involved in the works contract of dyeing and processing. Following that binding decision, the Tribunal's order was set aside and the tax liability under Section 3-B was upheld.

Conclusion: The issue was answered in favour of the State and against the assessee.

Final Conclusion: The revision succeeded, the Tribunal's order was set aside, and the tax levy on the works contract was sustained.

Ratio Decidendi: Where an issue on taxability under a works contract has already been conclusively decided between the parties on identical facts, and no timely challenge is pursued before the forum to which liberty was granted, the later revision must follow the binding earlier decision and sustain the levy.

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