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2015 (10) TMI 48
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.... Hyundai Motors India Limited and Ford India (P) Limited. The sales to Hyundai Motors were exempted under G.O.Ms.No.16 dated 12.1.1998 and the sales to Ford India were exempted under G.O.Ms.No.381 dated 15.9.1997. 4. Though exemptions were allowed as claimed, the Assessing Officer added the sales turnover made to both these companies, to the taxable turnover of the petitioner, for the purpose of seeing as to whether the petitioner crosses the threshold limit for the applicability of Additional Sales Tax Act or not. Once it was found that the taxable turnover so arrived at, exceeded the threshold limit, the Assessing Officer imposed additional sales tax by an order dated 26.6.2006. Further, a penalty under Section 12(3)(b) of the Tamil Nadu General Sales Tax Act was also imposed. 5. The petitioner preferred a first appeal before the Appellate Assistant Commissioner in A.P.No.144 of 2006. The First Appellate Authority held, by an order dated 20.11.2007, that for the purpose of computation of additional sales tax liability, the sales effected to Ford India cannot be included within the taxable turnover due to the specific exemption available under the Tamil Nadu Additional Sales....
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....ii) Commissioner of Wealth Tax Vs. E.W.Gymkhana [JT 1997 (8) SC 585] (iv) South India Corporation Limited Vs Commercial Tax Officer [(2001) 124 STC 654] and (v) State of Tamil Nadu Vs. Vaikundam Rubber Co. [(2008-09) 14 TNCTJ 195] 9. As we have pointed out earlier, the first contention of the learned counsel for the petitioner is that there cannot be two different taxable turnovers, one for the purpose of the Tamil Nadu General Sales Tax Act, 1959 and another for the purpose of the Tamil Nadu Additional Sales Tax Act, 1970. According to the learned counsel for the petitioner, the Tamil Nadu Additional Sales Tax Act, 1970, though an independent statute, is part of the General Sales Tax Law of the State and that therefore, they have to be read together. In support of the above contention, the learned counsel for the petitioner relies upon the decision of the Supreme Court in Ashok Service Centre. 10. However, Dr.Anita Sumanth, learned Special Government Pleader contended that the decision of the Supreme Court in Ashok Service Centre arose out of the Orissa Additional Sales Tax Act, 1975, which contained a provision in Section 2(b), that made the words and expr....
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....in the rate of tax payable on the sale of a particular material, the turnover does not get excluded from the total turnover or taxable turnover. Therefore, the observations contained in Sumangalam Steels to the effect that the 1970 Act is an independent piece of legislation, has to be understood only in the context in which it was made. In Sumangalam Steels, this Court did not analyse the provisions of the Tamil Nadu Additional Sales Tax Act, 1970, to see whether it could operate independently of the 1959 Act or whether it required a pair of crutches from the 1959 Act to walk. 16. Therefore, it would be better to have a careful look at the 1970 Act in an historical perspective, since the Act underwent a complete metamorphosis from 1970 to 2002. 17. The State of Tamil Nadu enacted the Tamil Nadu Additional Sales Tax Act, 1970, providing for the levy of an additional tax on the sale or purchase of goods. The scheme of Section 2 of the Act, as it stood at the time of enactment in 1970, was to levy an additional tax by the process of increasing the tax payable under the Tamil Nadu General Sales Tax Act, 1959, by 10%, the said increase representing the quantum of the additional ta....
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....ore, while testing the correctness of the contentions raised on behalf of the petitioner, we have to keep in mind (i) the distinction between the 1970 Act and the 1976 Amendment Act and (ii) the object of levy of additional tax. 23. The Tamil Nadu Additional Sales Tax Act, 1970, as it was originally enacted, contained only four provisions, from Sections 1 to 4. Section 1 gave the short title and commencement. Section 2, which was the charging section, imposed a levy of additional tax in the case of certain dealers, whose total turnover for a year exceeded a particular limit. Section 3 imposed the levy of additional tax upon an importer or whole sale dealer under the Tamil Nadu Sales of Motor Spirit Taxation Act, 1939. Section 4 empowered the Government to make rules. 24. By Amendment Act 2 of 1976, Section 2(1) of the 1970 Act was substituted with a new Sub-Section, containing Clauses (a) and (b) and a proviso under Clause (a). Section 2(1) of the Act, as it was originally enacted under the 1970 Act and what it became after the 1976 Amendment, can be best appreciated, if presented in a tabular form as follows : Section 2(1) under the 1970 Act Section 2(1) under the 1976....
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....isions of the said Act shall apply in relation to the additional tax payable under Clause (a) as they apply in relation to the tax payable under the said Act. 25. But later, Section 2(1)(aa) was inserted and Section 2(1)(a) was omitted by the Tamil Nadu Amendment Act 37 of 1999. Section 2(1)(aa) reproduced the very language of Section 2(1)(a) inserted under the 1976 Amendment Act, but with two modifications. One related to the quantum of taxable turnover that became the threshold limit and the rate of tax. The other related to the inclusion within the purview of Section 2(1), even a principal, selling or buying goods through agents. 26. In other words, after the Amendment Act 37 of 1999, the scope of Section 2(1) was enlarged to include even a principal, selling or buying goods through agents, within the ambit of the charging section. At this juncture, two explanations namely Explanation I and Explanation II were also inserted under Section 2(1)(aa). Subsequently, three more explanations namely Explanations III, IV and V were inserted under Amendment Act 23 of 2002. 27. After the Amendment Acts 37 of 1999 and 23 of 2002, the charging section namely Section 2(1)(a....
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....this clause does not include the turnover of resale, taxable under Section 3-H of the said Act. Explanation V : 'Taxable turnover' for the purpose of this clause in respect of a dealer liable to pay tax under Section 7-C of the said Act for the financial years commencing on the 1st day of April 1993, shall be the total value referred to in the said section." 28. Despite the fact that the 1970 Act underwent substantial amendments in 1976, 1980, 1999 and 2002, the Legislature did not introduce a section exclusively providing for definitions of words and expressions. It is true that the Tamil Nadu Additional Sales Tax Act, 1970 did not contain a provision that expressly stipulated that the words and expressions contained therein would have the same meaning as assigned to them in the Tamil Nadu General Sales Tax Act, 1959. It must be remembered that the charging Section 2 as it was originally enacted in 1970, spoke only about total turnover. It was only in 1976 that the expression 'total turnover' was changed to 'taxable turnover'. But, neither of these expressions have been defined in the 1970 Act. 29. Until the amendment under Act 37 of 1999, th....
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....ply in entirety, they would naturally apply along with that part of the 1959 Act, which contains definitions. 33. Once it is seen that the Tamil Nadu Additional Sales Tax Act, 1970 does not contain a provision for definitions, once it is seen that under Section 2(1)(b) of the Tamil Nadu Additional Sales Tax Act, 1970, the provisions of the 1959 Act are made applicable to the additional sales tax payable under the 1970 Act and once it is seen that even for the purposes of assessment, levy of penalty, appeals and revisions, the assessees as well as the Department may have to take recourse only to the 1959 Act, it follows as a corollary that the Tamil Nadu Additional Sales Tax Act, 1970 does not have independent legs to stand on its own. 34. Therefore, we are of the considered view that the Tamil Nadu Additional Sales Tax Act, 1970, is, in a way, a parasitical piece of legislation, that would have to depend upon the provisions of the Tamil Nadu General Sales Tax Act, 1959, (i) for the purposes of definitions of words and expressions (ii) for the purposes of assessment and levy (iii) for the purposes of collection and (iv) for the purposes of statutory remedies such as appeals, r....