2022 (6) TMI 772

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....XVII declaration and claimed concessional rate of tax at 3% under section 3(3) of the Tamil Nadu General Sales Tax Act, 1959, (in short, "TNGST Act") for the assessment years in question viz., 1990-1991, 1991-1992 and 1992-1993. After scrutiny of the same, the assessment officer passed the original assessment orders dated 27.03.1998, levying tax under section 23 of the TNGST Act and penalty under section 45(2)(e) of the TNGST Act, for the violation of section 3(3), after having held that since the tin containers were used for packing the vanaspathi manufactured by the petitioner, the same can be treated only as packing materials and hence, they were not eligible for the concessional rate of tax on the purchase of tin containers against Form XVII declaration. 3.Challenging the orders of assessment, the petitioner preferred appeals before the Appellate Assistant Commissioner (CT), Chennai, who, by a common order dated 25.06.1999, set aside the original assessment orders and remanded the matter to the assessing officer for fresh consideration, after verifying the entries in the registers for all the years, in which they had filled up all the details of purchases and its disposal in....

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....t to the notification dated 26.11.1985 issued by the Government of India under Clause 14 of Vegetable Oil (Control) Order 1947 and submitted that the delivery and/or sale of Vanaspathi should be in tin containers; the provisions of the Standards of Weights and Measures (Packaged Commodities) Rules, 1977 also mandates sale and delivery of Vanaspathi in packages, which were to be in units of 5 kilograms; and therefore, packing of refined oil or vanaspathi in tin containers was one of the integral parts of the manufacturing activity of vanaspathy. Without considering those aspects, the assessing officer erred in concluding that the tins purchased have not gone into production and changed its identity and they were used as packing materials and therefore, the petitioner was not eligible for concessional rate of tax under section 3(3) of the TNGST Act and they committed an offence under section 45(2)(e) for violating the provisions of section 3(3); and the said finding of the assessing officer was also erroneously affirmed by the Appellate Authority as well as the Tribunal. In support of the said contentions, the learned counsel placed reliance on several case laws. Even otherwise, the ....

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....han consumables for use by the purchasing dealer in the manufacture inside the State for sale by them of any goods mentioned in the First Schedule other than those falling under item 70(c) and item 107 of the said Schedule. Therefore, the petitioner is entitled for concessional rate of tax for purchase of tin containers by them. 10.To buttress the stand of the petitioner, the learned counsel for the petitioner placed reliance on several decisions, more particularly, (i)M/s.J.K.Cotton Spinning & Weaving Mills Co.Ltd v. Sales Tax Officer, Kanpur and another [(1965) 1 SCR 900: AIR 1965 SC 1310 : (1965) 16 STC 563], in which, the Hon'ble Supreme Court pointed out that "the process of designing may be distinct from the actual process of turning out finished goods. But there is no warrant for limiting the meaning of the expression "in the manufacture of goods" to the process of production of goods only. The expression "in the manufacture" takes in within its compass, all processes which are directly related to the actual production. Goods intended as equipment for use in the manufacture of goods for sale are expressly made admissible for specification. Drawing and photographic mat....

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....ver, the authorities below erred in disallowing the claim of the petitioner for concessional rate of tax, which warrants interference by this court by allowing these writ petitions. 11.On the other hand, it is the stand of the respondents that the tin containers are packing materials and they are not used in the manufacturing activity and hence, the petitioner was not entitled to avail the concessional rate of tax under section 3(3) on the purchase of packing materials, as against issuance of form XVII declaration. Accordingly, the first respondent levied tax at the rate of 8% upto 06.05.1990 and at 5% from 07.05.1990 on the purchase of packing materials, which was rightly affirmed by the appellate authorities. 12.Before going into the rival submissions, it is but necessary to refer to the relevant provision of section 3(3) of the Act, which reads as under: "Notwithstanding anything contained in sub-section (1) or subsection (2), the tax payable by a dealer in respect of sale of any goods, other than consumables to another for use by the latter in the manufacture inside the State for sale by him of any goods - mentioned in the First Schedule other than those falling ....

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....ough the ratio laid down therein are not disputed. It is also to be noted that the provisions of law cannot be interpreted by altering, deleting or inserting any words by this court and hence, the tin containers purchased by the petitioner cannot be construed as if the same were involved in the manufacturing activity, in the absence of any concrete material to prove the same. 14.At this juncture, it is noteworthy to refer to the decision of the Hon'ble Supreme Court in Union of India v. Rajiv Kumar [(2003) 6 SCC 516], wherein, in paragraphs 22 and 23, it was held as follows: "22.While interpreting a provision, the court only interprets the law and cannot legislate it. If a provision of law is misused and subjected to the abuse of process of law, it is for the legislature to amend, modify or repeal it, if deemed necessary. (See CST v. Popular Trading Co, (2000) 5 SCC 511). The legislative casus omissus cannot be supplied by judicial interpretative process. 23.Two principles of construction - one relating to casus omissus and the other in regard to reading the statute/statutory provision as a whole - appear to be well settled. Under the first principle a casu....

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....inst Form XVII, no doubt this is a cross violation of the conditions stipulated in section 3(3) of the TNGST Act and as per law it warrants penalty under section 23 of the TNGST Act.... Thus, the levy of penalty under section 23 is also in accordance with law and infact though the assessing authority has levied penalty at 1-1/2 times the tax payable on the turnover. The first appellate authority has restricted the quantum to one time. Here also we do not find any reason to interfere with the orders of the first appellate authority and thus we sustain the order of the Appellate Assistant Commissioner in having reduced the quantum of penalty to 100% against 150%". "In this case the assessing authority has levied penalty under section 23 of the TNGST Act at 1-1/2 times the tax due on the disputed turnover. But on appeal the first appellate authority has modified the quantum of penalty to one time i.e.100% instead of 150% levied by the assessing officer. The contention of the State is that the purchase of tin container against Form XVII is an offence as the dealers are not entitled to tin containers against Form XVII and that the above purchasers have also not been us....