TaxTMI 
TaxTMI 
2011 (3) TMI 1501
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....ery, i.e. reverse osmosis plant by the petitioner do not fall under section 3(5) of the Tamil Nadu General Sales Tax Act, when the petitioner satisfied both the conditions as prescribed under the section? (b) Whether the Tribunal is correct in rejecting the claim of concessional levy when the petitioner has filed declaration forms as per the provisions of section 3(5) of the Act? The revision petitioner/assessee is a dealer in water treatment plant at Chennai, having registered office at No. 41/5, First Trust Cross Street, Mandavelipakkam, Chennai 28. They have reported a total and taxable turnover of Rs. 26,41,284.27 and Rs. 13,66,962 respectively. The relevant assessment year is 1998-99 and they have claimed exemption on the turnove....
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....filed the present revision. The learned counsel appearing for the petitioner-assessee submitted that the order passed by the Tribunal is illegal, wrong, without basis and justification. He further submitted that the water treatment plant comes within the plant and machinery enumerated in the Eighth Schedule. He further contended that the Tribunal is wrong in comparing section 3(5) with section 7A of the Act and wrongly holding that the water treatment plant is not used in the manufacturing of goods by the assessee. Therefore, the order passed by the Tribunal is not in accordance with law and the same has to be set aside. The learned counsel appearing for the Revenue submitted that the Tribunal has considered all the facts and circumst....
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....c. The dealer filed a detailed technical note before the Tribunal. The relevant provision is section 3(5) of the Act, which reads as follows: "(5) Notwithstanding anything contained in sub-section (2), but subject to the provisions of sub-section (1), the tax payable by dealer in respect of sale of any of the goods mentioned in the Eighth Schedule to any other dealer for installation of, and use in, his factory site situate within the State for the manufacture of any goods shall be at the rate of three per cent on the turnover relating to such sale: Provided that the provisions of this sub-section shall not apply to any sale, unless the dealer selling such goods furnishes to the assessing authority in the prescribed manner and within ....
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.... machineries and tools used with the machineries mentioned in sub-items (i) to (viii) above." From a reading of the above, it is clear that what is mentioned in entry 3 is machineries of all kinds other than those mentioned in the First Schedule. In the present case, the electricity is used for recycling of used water by reverse osmosis technology. There is no dispute that the said machinery is run by electricity and also does not come under the specified machinery in the First Schedule. Therefore, the said plant falls within the 3rd entry. The petitioner/assessee satisfied the first condition. In respect of the second condition, "use in the factory site within the State", there is no dispute by any of the authority that it is not used i....
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....he Act and holding that the plant and machinery is used only as an aid in the manufacture of goods by the assessee. What we have to see is, how the plant and machinery are used in the factory. The words "used in his factory site within the State for manufacture of goods" cannot be construed so narrowly so as to confine it to direct use only. It may be direct or indirect. Emphasis is only on use. Section 3(5) of the Act is a beneficial provision. It provides for concession for tax purposes to encourage industrial activity. It should be liberally construed. It is well-settled principle that a provision which is a taxing statute, granting concessional and incentives for promoting growth and development, should be construed liberally. Theref....