TaxTMI 
TaxTMI 
2012 (3) TMI 388
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....aking place in Tamil Nadu, is it open to the Appellate Tribunal to sustain the levy of tax on such transaction in spite of the specific exclusion provided under section 3B(2)(a) of the TNG ST Act, 1959? 3. In respect of other assessees engaged in similar business for the assessment years TNGST: 1989-90 and 1993-94, which are subsequent to Forty-sixth Amendment to the Constitution, the first appellate authority held that the orders of the Appellate Tribunal in T.A. No. 1546 of 1979 dated June 17, 1979 is applicable, and similar transaction are not liable to tax. After initiating proceedings under section 34 of the Act, the Joint Commissioner dropped the suo motu proceedings by his order dated November 23, 1998 on the same issue. In such circumstances, is it open to the Tribunal to proceed to consider the issue once again in detail, and take a view different from the view already taken by the earlier Bench? 4. Whether in the absence of any 'taxable event', in the State of Tamil Nadu is the Tribunal justified in affirming the levy of tax on the transactions relating to mere 'exchange' which are outside the purview of levy of sales tax?" The petitioner-assessee....
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....penalty. Aggrieved by that order, the petitioner/assessee has filed the present revisions raising the above substantial questions of law. The learned counsel appearing for the petitioner/assessee contended that the Tribunal was wrong in holding that it is a deemed sale. He further contended that the Tribunal is wrong in holding that the transfer of property by way of replacement of defective parts in the compressors while undertaking repair works took place within the State of Tamil Nadu and hence, the transactions are liable to tax. He further submitted that the authorities have failed to appreciate the fact that the petitioner/assessee received defective compressors from their dealers, who had earlier received the same from their respective customers to whom the said compressors were sold by them and later, these defective compressors were despatched to the factory at Hyderabad for repair and reconditioning; that the repaired compressors were taken into the petitioner's/assessee's floating stock in due course on receipt from Hyderabad. But soon after the receipt of defective compressors, the reconditioned compressor was given to the authorised dealer from their floatin....
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....ties below have taken a view that the transaction is works contract and the transfer of property in goods involved in the execution of works contract and thereby, imposed sales tax on such transfers. The authorities have also held that there is no separate particulars towards labour charges and value of the property transferred. The provision of section 3B of the Act was attracted and the lower authorities correctly allowed 30 per cent deduction towards labour charges and the remaining 70 per cent was taxable at the appropriate rate. From the transaction it is clear that the supply of defective compressor has been returned as a rectified compressor and therefore, the authorities below held that it amounted to works contract. After the 46th Amendment, the definition of "sale" was enlarged including the transfer of property of goods involved in the execution of the works contract and thereby, imposed sales tax on such transfer and therefore, the tax on transfer of property in goods "whether as goods or in some other form" involved in the execution of works contract falls within the ambit of article 366(29A) of the Constitution of India. In this case, the defective compressor is repai....
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....ame model and specification." The Tribunal after noting the same, held that the activities were one of repairs and remaking and it would not amount to manufacture of any new article. From this, it is clear that they are repairing the compressors. After considering all the activities of the petitioner, the Tribunal, in paragraph 26 held that, it is only "works contract" and the same reads thus: "26. While looking deep into the nature of transaction, it is found that the customer is never aware of the repair work being carried out in other State. The customer is not placing orders with the factory at Hyderabad for repair and return of the repaired compressor from Hyderabad to him. On the other hand the transaction is made across the counter of the appellant, by the customer by delivering the defective compressor and receiving the repaired compressor. The point to be noted is that the parts to be replaced in the defective compressor and labour charges are arrived at and collected and even before the same compressor could be got repaired and given a replacement by a repaired compressor is made, from the godown-stock. The parts to be replaced and the 'work to be carried out....