TaxTMI 
TaxTMI 
2017 (11) TMI 466
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.... Iron sheets would be eligible for exemption under sub-section (a) of section 38 of the TNGST Act 1959 even after conversion into new product of pipes to fulfill the obligation under contract? 3. When the respondent taken delivery of Iron sheets and handed over the same to job works for conversion of the same into spiral pipes, whether it would confer the transaction still under inter-State trade or commerce after taking delivery of the goods so purchased from interstate? 4. Is the inter-State purchase has been terminated when delivery is taken by the respondent, whether the State of Tamil Nadu is competent to levy tax or subsequent sale of pipes involved in the contract executed in terms of provision of section 9 of the TNGST Act 1959?" 3. As pleadings and submissions are common, both the Tax Case Revision Petitions are disposed of, by a common order. 4. Short facts leading to the revisions are that Tvl.Gammon India Ltd., was awarded a tender, by Tvl.CMWSSB, Chennai and in turn Tvl.IVRCL Infrastructre and Projects Limited, Chennai, respondent herein, was awarded sub-contract by Tvl.Gammon India Ltd., to execute the work. The respondent herein purchased good....
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....mitted that the order of the TNSTAT(MB), dated 01.09.2015, is not sustainable, as per the section 3(B) of the TNGST Act 1959. He further submitted that the Tribunal has failed to consider the fact of change of the identity and emergence of a new commodity, and thus, failed to accept the stand taken by the department and exempted under Section 3-B(2)(a) of TNGST Act. 1959. According to him, commodity "Iron and Steel (HR Coil)" would fall under Section 14 of CST Act, 1956, classified in Entry iv(vi), which states that, "sheets, hoops, strips and skelp, both black and galvanized, hot and cold rolled, plain and corrugated, in all qualities, in straight lengths and in coil form, as rolled and in riveted condition". Whereas Steel Pipes would fall under Section 14 of CST Act, 1956, classified in Entry iv(xi), which states that, "(xi) steel tubes, both welded and seamless, of all diameters and lengths, including tube fittings". 9. Placing reliance on a decision of the Hon'ble Supreme Court in State of Tamil Nadu v. Pyare Lal Malhotra reported in (1976) 37 STC 319 (SC), learned Additional Government Pleader (Taxes) submitted that each item so specified, forms a separate species for e....
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....uarely covered by a decision of the Hon'ble Division Bench of this Court in The State of Tamil Nadu v. M/s.Sun Paper Mill Ltd., reported in 2009 (23) VST 191 (Mad.), wherein, this Court negatived the very same submissions, made by the State. 14. Heard the learned counsel appearing for the parties and perused the materials available on record. 15. Before adverting to the rival submissions of the parties, it is relevant to extract Section 3 of the Central Sales Tax Act, as follows: "3. When is a sale or purchase of goods said to take place in the course of inter-State trade or commerce:- A sale or purchase of goods shall be deemed to take place in the course of inter-State trade or commerce if the sale or purchase- (a) occasions the movement of goods from one State to another; or (b) is effected by a transfer of documents of title to the goods during their movement from one State to another." 16. In T.A.Nos.180 of 2007 and 92 of 2011, the Tamil Nadu Sales Tax Appellate Tribunal (Main Bench), Chennai, after considering the pleadings and submissions, framed the following point for consideration, "Whether the order of the first a....
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....rchased or in some other form. In the present case, HR sheets in coils were purchased from M/s.SAIL in pursuance of the contract entered with CMWSSB and the entire movement of goods were in connection with its contract only. The item of HR sheets in coils used as raw-materials by the appellants are incorporated into the Works Contract the same form except the same may be fashioned to shoot their requirement of CMWSSB before the same merge into the works which is thereafter identified as immovable property. At the time of incorporation, HR sheets in coils do not lose their nature or form and therefore cannot be subjected to tax, as the said goods are already subjected to tax as declared goods under the CST Act. The activity carried out by the appellants under the contract was procurement of the steel materials with the specifications ordered by CMWSSB and preparation of pipes by cutting, rolling and welding into pipes to be incorporated into the works. If the goods are moved as inter-State nature in character, such movement of goods is in a pursuance of the contract entered into by the dealer locally, and therefore, the deduction under Section 3-B (2)(a) of the Tamil Nadu General Sa....
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.... the impugned turnover. Hence we hereby order to uphold the order of the first appellate authority in this regard. Accordingly, this point is answered. 20. With regard to the assessment made on the turnover of Rs. 2,51,347/- taxable at 16%, Rs. 44,500/- taxable at 10%, Rs. 3,99,636/- taxable at 12%, Rs. 1,84,500/- taxable at 4% and Rs. 9,92,428/- taxable at 4%, it is seen that the Assessing Officer had levied appropriate rate of tax on the deemed sale value of Metal, RCC pipes, MH cover, Bricks etc., used in the execution of Works Contract. Even at the time of hearing before this forum, the learned counsel for the appellants did not produce and file any documentary evidence on record to the effect that they were not taxable and exempted from tax. In the circumstances, we find no valid reasons to interfere with the order of the lower authorities on the assessment made on the impugned turnover. Hence we hereby order to sustain the order of the first appellate authority in this regard. Accordingly, this point is answered. 21. With regard to assessment made on the turnover of Rs. 24,17,776/- taxable at 2% and Rs. 4,06,64,170/- taxable at 2%, it is seen that the Assess....
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....ing at the above circumstances, it is found that the goods moved from the assesee to Sivakasi as a result of the sale. What happened later is that the concern of the assessee had no connection what so ever after the dispatch of paper to given basis. What moved out of the state were only news magazines and not news print with which the assessee is concerned. Therefore, the sales would fall under the local Act,s purview and the order of the Appellate Assistant Commissioner is not proper, therefore, liable to be set aside. Appellate Assistant Commissioner's order is set aside and the Assessing Officer's order is restored." Aggrieved by that order, the assessee has filed the appeal before the Tamil Nadu Taxation Special Tribunal, Chennai, in T.C.A.No.141 of 1999. The Tribunal, by its order dated 28.03.2003, while allowing the appeal, held that all the sale transaction would fall within the ambit of Section 3(a) of the Central Sales Tax Act, 1956 and therefore, they are inter-state sales, which do not attract the provisions of the Tamil Nadu General Sales Tax Act, 1959 or Kerala General Sales Tax Act, 1963. Aggrieved by that order, the Revenue has filed the present writ....
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.... no dispute. We have to see here whether there is sale occasioning the movement of goods. In the case on hand, the seller and the buyer contemplated in movement of goods from Tamil Nadu to Kerala. At the instruction of the buyer, the goods were despatched to Sivakasi, wherein conversion took place and after conversion, the goods were moved to Kerala. Because of conversion, it cannot be held that there is no movement of goods. It is only for the purpose of Section 5(3) of the Act that any goods undergoing commercial change is relevant. It is not for the purpose of determining the inter-State sale under Section 3(a) of the Act. Mere stoppage at Sivakasi and conversion would not alter the character of the transaction. The stoppage and conversion occurred only at the instance of the buyer at Kerala. There is no dispute in respect of the contract. The goods were moved in pursuant to the contract. The goods despatched to Sivakasi were not meant to be sold in the open market. There is no restriction that the goods should be moved intact. It is not for the revenue to suggest that the goods must reach as it is. The authorities, who are acting as guardian of the revenue, must examine and con....