TaxTMI 
TaxTMI 
2022 (4) TMI 126
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....s come up with this tax case, proposing the following substantial questions of law for determination of this court: "1. Whether the order of the Appellate Tribunal is correct in interpreting the expression "does not sell the goods so manufactured" occurring in sub Section (4) of Section 3 of the Tamil Nadu General Sales Tax Act, 1959 as including not only intra state, but also export sale? 2. Whether the Appellate Tribunal is correct in invoking the principle of situs as envisaged in explanation 3 (a) to section 2(n) of the Tamil Nadu General Sales Tax Act, 1959 for the purpose of interpretation of the expression "does not sell the goods so manufactured" as contained in sub Section (4) of Section 3 of the Act so as to brin....
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....issioner (CT), Chennai (South) Division, Chennai v. Tvl.Blue Diamond Leders, wherein it was held that "the process of conversion of wet blue leather into finished leather amounts to 'manufacture' within the meaning of Section 3 and therefore, there was no misuse of declaration in Form 17 by the assessee, while purchasing chemicals for processing the leather and the assessee was not liable to pay higher rate of tax on such purchase of materials". For better appreciation, the relevant passage of the said decision is extracted below: "2. Section 3(3) of the TNGST Act mandates that notwithstanding anything contained in sub-section 2, 2(a) or 2(c), the tax payable by all the dealers shall be liable to tax @ 3% unless the goods p....
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....e, the concessional rate of tax under section 3 was available to such manufacturer. The relevant portion of the said judgement as well as the conclusion of the Division Bench are quoted below for ready reference:- "9. The phrases mentioned above have been explained by the respondents in their written statements filed before the Tribunal, which are as follows : Splitting & Shaving The leather is shaven in the back side for having even thickness. Washing Watered and wetting agent is added and drumming is done and the process is carried for 15 minutes and thereafter, it is again washed for removal of dust and stains. Rechroming Water, basic chrome sulphate, and cationic fatliquor a....
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....r the 12 processes, which have been described in the earlier paragraphs, wet blue leather gets transformed into finished leather, after which, it loses its identity as wet blue leather and becomes a different commodity with a distinct identity in the market and in the industry concerned. Therefore, we find that the activity satisfies all the propositions laid down by the Supreme Court to decide as to whether a process is a manufacture or not. The Tribunal did not take note of the factual finding of the Appellate Assistant Commissioner, who had not only referred to various stages, which the wet blue leather undergoes and becomes finished leather, but also the fact that each activity is known in the industry with different name. One is called....