TaxTMI 
TaxTMI 
TaxTMI 
2018 (5) TMI 717
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....l Sales Tax Act, 1956 read with Section 16(2) of the Tamil Nadu General Sales Tax Act, 1959. On appeal, the Appellate Assistant Commissioner (CT)-I allowed the appeal and thereafter, the Assessing Officer reassessed the sale of sugar, as the item was not 100% sugar and it contained 96% of Sucrose and 4% of Starch. 3. The respondent dealer sold Sugar N.F. (National Farinuiary, USA) to an inter state dealer, Tvl.Smith Kline Bleacham Asia (P) Ltd., Bangalore, for Rs. 1,19,600/-, vide Invoice No.11161, dated 24.08.96. The consignment was intercepted at Poonamallee Check post and the goods were detained. The dealer moved the Tamil Nadu Taxation Special Tribunal, Chennai, for release of goods. The Tribunal directed to send a sample of the goods to the Government Analyst, Food, Analysis Laboratory, King Institute, Guindy, Chennai-32, for testing. The sample was found to have contained 96% of sucrose and about 3% of corn starch. Since there was admixture of starch in it to the extent necessary for purpose required for its use, the Assessing Officer has made assessment of tax on the turnover of Rs. 1,19,600/- at 11% towards sale of sugar and levied penalty, under Section 16(c) of the Act. ....
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....rther argued that the Assessing Officer has not understood the meaning of sugar properly since sucrose is sugar even if the contents of Sucrose at 96% in the sugar. The Learned Advocate has also relied on the case law reported in 117 STC 108, 114 STC 7, 19 STC 24 and in 61 STC 190. The Hon'ble High Court of Kerala reported in 61 STC 190 in the case of the State Trading Corporation of India Limited v. The Assistant Commissioner (Assessment) and another has held as follows:- "Sugar as defined in Item No.1 of the First Schedule to the Central Excise and Salt Act, 1944". Sugar is defined in the First Schedule to the Central Excise and Salt Act, 1944 (The Excise Act) under Entry No.1 as Follows:- "Sugar produced in a factory ordinarily using power in the course of production of sugar. "Sugar means any form of sugar in which the sucrose content, if expressed as a percentage of the material dried to constant weight at 105" Centigrade, would be more than ninety". The Learned Advocate has also filed an Analytical reported received from the Department of Public Health and Preventive Medicine wherein the Government has analysed and certified as follows: The sample received from yo....
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.... not? But they have taken a plea that at Page 151 of the CST assessment file, the assessee themselves have stated that they have purchased sugar from the local dealers, but no local purchase of sugar N.F. reported in the A-9 returns filed the assessee being the importer of sugar from other countries, the sale of imported sugar is liable to tax. The sale made by the respondent is liable to tax in the absence of local purchase details. On perusal of the Central Sales Tax assessment file at Page 749, dated 15.07.2002, the department issued a pre-revision notice to the respondent/assessee and he given reply on 26.08.2002, that "we have purchased sugar from local registered dealers and repacked it and sold it to the customers. Hence, there is no manufacturing activity are mixing is involved." It was found at the Page 751 of the CST assessment file. In the State appeal, the State agitated the dispute of turnover regarding invoice No.11161 and disputed turnover of Rs. 1,19,600/- and the tax dispute is Rs. 13,156/-. On perusal of the TNGST assessment file, the respondents have filed A-9 returns along with A-1 monthly returns for the year 2006-07 under Tamil Nadu General Sales Tax Act, 1969....
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....before the Assessing Authority. Government Analyst, namely, Food Analysis Laboratory, King Institute, Guindy, Chennai, in the test, has reported that on analysis of the sample of sugar powder, it was found that it contains starch, sucrose total ash and ash insoluble. Therefore, the sample report categorically states that the goods dealt with, by the respondent is not sugar and hence, it is liable to be levied tax @ 11%, under entry 67 of part D of the First schedule. 8. Revision petitioner has further submitted that Analytical Report of the Government Analyst has proved that the goods dealt by the respondent is having sugar content of 96% alone and rest of the contents are Starch and Ash and therefore, submitted that it cannot be termed as 100% pure sugar, which alone is entitled to exemption. Even the respondent themselves have admitted before the Tamil Nadu Taxation Special Tribunal that they had bought sugar in granules and powdered them to Sugar N.F., and therefore, the Tribunal ought to have held that the goods dealt with by the respondent is not a sugar, but a sweetening agent in medicine and therefore, liable to tax under residuary Entry 67 of Part D of the First Schedule. ....