2013 (10) TMI 487

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....ed on the following substantial questions of law: 1.Whether the Appellate Tribunal is correct in holding that the sales turnover of terry towels/cotton terry knitted towels is liable for tax as falling under Entry 23 of Part-B of the First Schedule to the TNGST Act upto 16.07.1996 and falling under Entry 70 of Part-B of the First Schedule to the TNGST Act from 17.07.1996? 2.Whether the Appellate Tribunal is correct in holding that terry towels/cotton terry knitted towel sold by the petitioner is not an exempted commodity falling under the item 2(iii) of Part A of the Third Schedule to the TNGST Act or under Entry 16 of Part-A of the Third Schedule to the TNGST Act? 3.Whether the Appellate Tribunal is correct in holding that if terr....

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....at knitted cotton fabric and knitted towels were the one and the same commodity and the same were exempted from sales tax. Thus, the First Appellate Authority accepted the case of the assessee. Consequently, he allowed the appeal and also deleted the penalty. 4.Aggrieved by this, the Revenue went on appeal before the Sales Tax Appellate Tribunal, which held that there was no specific entry in the Schedule relating to stitched articles made of cloth, however, the stitched articles was taxable under Part B of First Schedule. The Tribunal pointed out that on the admitted fact by the assessee and the First Appellate Authority that the goods were stitched. Thus, even though it was terry towels, yet not sold in length, it came under Entry 23 o....

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.... stitching tarpaulin sheets and fixing eyelets did not bring into existence a new and distinct product with total transformation in the original commodity and the process did not amount to "manufacture", since the tarpaulin, after stitching and eyeletting continued to be only cotton fabric". 7.Applying the said decision to the facts of the present case, learned counsel for the assessee submitted that mere stitching on both edges would not make the goods in question as falling under the First Schedule for taxation. We agree with the submission of the learned counsel for the petitioner for the reason that the department had already accepted the case of the assessee during 2007 for the assessment years 1992-93 and 1995-96. The Revenue does ....