TaxTMI 
TaxTMI 
2011 (3) TMI 1420
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....disputed, we are not required to set out herein the entire factual position at length. However, for the purpose of deciding the present appeal, whatever facts are required to be dealt with and stated are being stated hereinafter. The N.L.C., namely, Neyveli Lignite Corporation is a Government of India enterprise and a company, and is involved in the activity of generation and supply of electric energy to various State Electricity Boards. The said company set up a plant to produce leco, which is a form of lignite in the year 1965. The said plant, however, was having frequent breakdowns and was incurring huge losses. Consequently, an effort was made to upgrade the plant which, however, turned out to be a failure due to which the entire plant was closed down on April 4, 2001 as unviable. Thereafter the company proceeded to dispose of the entire plant and machinery as according to the company, the plant was of not marketable value and also because it had lost its use and outlived its utility and had no value except as scrap. The said company thereafter appointed M/s. Metal Scrap and Trading Corporation Ltd. (hereinafter referred to as, "MSTC") on November 3, 2004, a Government of In....
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....ich arose, the respondent wrote a letter dated April 7, 2005 to the sales tax authorities mentioning therein about the details and manner of the transaction that had taken place regarding purchase of the scrap by the respondent pursuant to the e-auction conducted by MSTC. In the said letter the entire background facts leading to the e-auction and acceptance of the tender were stated. A form being form No. XIV was also filled up by the respondent wherein it was mentioned by it that they had purchased the plant and machinery as a whole in one lot but the same also enclosed another declaration made by the respondent herein indicating the full particulars of the goods and stating therein that the total sale value ex-taxes and duties as a whole in one lot is Rs. 70,01,00,019. While giving the said particulars of the case, it was also specifically mentioned by the respondent that what was purchased was scrap material and thereafter the details of such scrap materials were given in the said declaration. As against the aforesaid letter written by the respondent, the sales tax authorities sent a letter to the respondent on April 29, 2005 stating therein that if the plant and machinery ha....
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....ds were delivered in lots even from delivery note No. 1 dated May 5, 2005 with corresponding loads in the lorry. The finding that the sale was a plant and machinery as if there was intention to buy and sell plant and machinery is perverse and overlooks the dispute with regard to 12 per cent sales tax at every stage between the petitioners and buyers. Based on the communication of the Commercial Tax Officer, Cuddalore, the second respondent dated May 10, 2005 to the first respondent, during the period of sale, only four per cent tax was charged to the buyers in view of the protest of the buyers. The petitioners state that the difference over and above four per cent was subsequently recovered on November 22, 2005 from the EMD of the buyers and paid under protest to the second respondent, the Commercial Tax Officer, Cuddalore, on November 23, 2005 consequent to later developments." The Sales Tax Department contested the writ petitions and the learned single judge after hearing the counsel appearing for the parties allowed the writ petitions holding that the respondent is liable to pay sales tax at four per cent only. Being aggrieved by the aforesaid judgment and order passed by the....
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....what was sought to be sold was iron and steel scrap and rejected/condemned and obsolete secondary arisings, etc. The said position is also reiterated in clause 4.1 which also indicates that what was being sold through the e-auction was scraps and secondary arisings. The acceptance letter on which heavy reliance was placed by the counsel appearing for the appellants mentions the goods sold as plant and machinery but it is also indicated therein that it is sale of plant and machinery as per the terms and conditions of the e-auction. The terms and conditions of the e-auction indicated from the agreement indicate that what was being sold was scrap. The said position is also reiterated in the said acceptance letter when it refers to the total value of the scrap. In the clarification issued by the Department itself, at one stage, i.e., by their letter dated April 29, 2005, it was clearly mentioned that if the plant and machinery has been sold as scrap and the bidder was asked to dismantle and transport it as scrap, such sales of scrap would be taxable at four per cent without surcharge. There is yet another important factor which should not be lost sight of and that is using of exp....