TaxTMI 
TaxTMI 
2014 (8) TMI 1212
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....ed the cost of goods including sales tax and not collected tax separately and in terms of Explanation (1-A) to Section 2 (r) of the Tamil Nadu General Sales Tax Act, 1959, any amount collected by a dealer by way of tax should not be included in the turnover. Accordingly, the Assessing Officer revised the assessment in respect of each year levying tax on the entire amount without giving the benefit of the taxable portion of the turnover. The appeals by the assessee to the first appellate authority was futile against which six appeals were filed before the Tribunal. The facts, relevant to each assessment year, as set out by the Tribunal in its order, are as follows :- TA 168/2005 (2001-02) (TNGST) : The appellant were originally assessed on a total taxable turnover of Rs. 7,70,43,317/= and Rs. 6,92,69,581/= respectively for the assessment year 2001-2002 under the TNGST Act, 1959, in the proceedings dated 16.7.2003. The taxable turnover inter alia includes an amount of Rs. 31,23,110/= collected towards sales tax which was rejected by the Assessing Officer on the ground that the amount was collected without showing it separately in the invoices and however shown including i....
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.... taxable turnover of Rs. 13,27,33,895/= and Rs. 12,92,23,324/= along with re-sale turnover of Rs. 32,19,958/= respectively for the assessment year 2004-2005 under the TNGST Act, 1959, in the proceedings dated 12.12.2005. In this year also, the verification of the sale bills and sales registers revealed that the dealer had sold goods by charging the cost of goods including sales tax, surcharge, etc., and in their sale bills, taxes were not collected separately on the cost of the goods. Hence, following the Explanation (1-A) to Section 2 (r) of the TNGST Act, 1959, the Assessing Officer had disallowed the claim of exemption as sales tax collection on Rs. 63,44,297/= and assessed to tax. On appeal, the first appellate authority had dismissed the appeal for the reasons stated thereon. Hence, aggrieved, the appellants preferred this present appeal. TA 129/2008 (2005-2006) TNGST) : The appellants were originally assessed on a total and taxable turnover of Rs. 17,88,38,682/= and Rs. 17,53,01,211/= along with re-sale turnover of Rs. 31,46,741/= as against the reported total and taxable turnover of Rs. 17,88,50,332/= and Rs. 17,53,01,211/= along with re-sale turnover of Rs. 31,4....
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.... goods and charged customer the price of the goods and the sales tax as one component. The assessee has also maintained books of accounts, which would disclose the price of goods, sales tax and other charges collected from the customers and on the basis of the said decisions, held that the assessee had shown break up details of sales tax and surcharge separately in the accounts for the assessment years mentioned above and set aside the orders of assessment. Against the abovesaid orders of the Tribunal, the Department is before this Court by preferring the above revisions. 5. The following substantial question of law arises for consideration in these revisions :- Whether on the facts and in the circumstances of the case the Tribunal was right in law in explaining the scope of (1-A) of Section 2 (r) of TNGST Act that if sale price is shown in the books of accounts, it is sufficient to get deduction amounts even though the sale invoice contains lump sum amount inclusive of tax without charging the tax elements separately? 6. Heard Mr.Manoharan Sundaram, learned Addl. Government Pleader (Taxes) appearing for the petitioner/Revenue in all the revisions. 7. The only gro....
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....ld by the Supreme Court in SLP (Civil) No.11699 of 1992 ((1993) 88 STC FRSC 1). However, at the time when the Tribunal disposed of the appeals, the Tribunal took into consideration the decision of this Court in S.M.Garments Vs State of Tamil Nadu (T.C. (R) No.1443/2006 dated 9.3.12) followed by Bata India Ltd. - VsState of Tamil Nadu (T.C. (R) Nos.1725/08, 1736/08 & 7/09 dated 4.1.2013) in arriving at its conclusion. 9. In S.M.Garments case (supra), this Court, while considering Explanation (1-A) to Section 2 (r) of the TNGST Act, was of the view that the intentment of the Act is only to support the deeming object of the Act, i.e., to exclude the tax component from the total turnover. If the books of accounts reflect the correct position with regard to sales tax component and the buyer and the seller know that the price of the goods is inclusive of tax component and if the tax is collected and paid out to the Government, the question of including the sales tax component in the total turnover is not correct. They also relied upon the judgment in State of Tamil Nadu Vs Ultramarine & Pigments Ltd. & Anr. (1979 (39) STC 53) where it is held that it is not necessary to show in t....
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.... Section 2(r) and Explanation 1-A of the Act and in para 12, it has held as follows: "12.A reading of the above said definition shows that 'turnover' means the total amount for which the goods are bought or sold, or delivered or supplied or otherwise disposed of in any of the manner referred to in clause (n). As far as Explanation (1-A) to Section 2(r) of the Tamil Nadu General Sales Tax Act, 1959 is concerned, where an amount charged by the dealer by way of tax is separately shown and not included in the price of the goods bought or sold, the same shall not be included in the turnover. In the present case, admittedly, the assessee had charged a consolidated amount for the execution of the works contract. The indivisible contract showed no bifurcation as regards labour and materials. Even in the accounts, the assessee did not have the details on the cost of the materials used to have a deduction of the labour charges from the consolidated price charged. The consolidated amount charged is stated to include the tax element. Even for claiming deduction on the labour charges, the assessee adopted the statutory percentage only. In the above circumstances, on a consolida....
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....s tax charges separately. It is merely claimed by way of adjustment entries in the account. Therefore, the Court relied on the Explanation and rejected the contention and taken a view that it shall form part of the turnover. Therefore, the judgment is not helpful to the Revenue and if the assessee had shown it separately in the books of accounts the turnover relating to the sale as well as tax component, certainly the assessee is entitled to the deduction from the turnover. 8. In another unreported judgment of this Court in W.P.No.37025 of 2002 dated 01.04.2004 in the case of TVL. MODERN FOOD INDUSTRIES (INDIA) LTD. V. THE REGISTRAR AND AOTHER, wherein, in paragraph 6 this Court has held as follows: "6. It could be seen that Explanation (1-A) to Section 2(r) clearly stipulates that any amount charged by a dealer by way of tax separately without including the same in the price of the goods bought or sold shall not be included in the turnover. The petitioners' contention can well be accepted if the words "without including the same in the price of the goods bought or sold" are not there in the statute. At this juncture, it is relevant to point out that in fact t....