AI Drafter 
TaxTMI 
TaxTMI 
2018 (2) TMI 2085
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....ssee on the export sales of duplex board effected to Tvl.Limtex (India) Ltd, Kothagiri, as well as the estimated turnover arrived from the records recovered, when an inspection was conducted by the Enforcement Wing Officers in the place of business of the respondents on 13.3.97 and 14.3.97, to an extent of Rs.33,91,442/-. The Assessing Officer determined the above turnover. The Assessing Officer also levied a penalty of Rs.6,03,253/- under Section 12(3)(b) of the TNGST Act, 1959, for the shortfall established, in the taxes assessed and the same be paid, as per returns and Rs.110/- under Section 22(2) of the TNGST Act, 1959 for contravening the provisions of Section 22(1) by collecting excess surcharge. 4. Being aggrieved against the orders of the Assessing Officer, the respondent preferred an appeal in Appeal No.240/2000 before the Appellate Assistant Commissioner (CT) Virudhunagar, disputing the entire addition of a turnover of Rs.52,50,248/- and penalty amount of Rs.6,03,253/- under Section 12(3)(b) of the Act and Rs.110/- under Section 22(2) of the Act. 5. The Appellate Assistant Commissioner, after hearing the parties, vide order dated 25.11.2002, deleted the turnover ass....
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.... have supplied duplex board to Tvl. Limtex India Ltd, Kothagiri, for packing of goods, intended for export by the exporters. The Government of Tamil Nadu have issued a Notification, under Section 8(5) of the CST Act, 1956 in No.II(1)/CTRE/46(a-10)/87 dated 20.3.1987, wherein, it has been stated that no tax under the said Act shall be payable by any dealer on the sale of packing material to the exporters for use in packing of goods intended for export and they also submitted that a certificate to this effect was also produced and accepted by the Appellate Assistant Commissioner. Hence, the dealer has stated that the Appellate Assistant Commissioner was correct in allowing the exemption on the sales turnover of packing materials to exporters, which does not require interference. In support of the said contention, the dealer cited a decision reported in 99 STC 35. 10. In respect of deletion of Additional Sales Tax by the Appellate Assistant Commissioner, the respondent has submitted that the Appellate Assistant Commissioner has correctly set aside the levy of Additional Sales Tax, which has to be calculated at the end of the financial year and on calculation, if the taxable turnove....
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....it into packing case, because the buyer had utilised the paper for packing the goods intended for export. Therefore, we uphold the view of the learned Appellate Assistant Commissioner and the prayer of the appellants/revenue to restore the tax levied on the turnover of Rs.18,58,807/- is not sustainable. b) Regarding the points mentioned by the Appellate Assistant Commissioner in his order that the respondents had purchased paper against Form XVII, there is no offence committed by the assessee/respondents. We have not gone into the fact, because this point had been disputed before us. c) The next point prayed by the appellants/revenue is to restore the Additional Sales Tax deleted by the learned Appellate Assistant Commissioner. In this case, the total turnover of the assessee/respondents had not crossed 100 crores during the financial year. Therefore, he has ordered to delete the Additional Sales Tax levied by the Assessing Officer holding that the turnover for the year cannot be split during the relevant period up to 31.7.96 as the turnover for the year 1996-97 had not exceeded 100 crores. The prayer by the appellants/revenue is that the provision to levy Additio....
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.... levy of additional sales tax till 31.07.1996 is invalid. (v) The decision of the Tribunal is contrary to the view passed by the Hon'ble Special Tribunal in O.P. No.739/99 dated 22.6.99 and in O.P. No.1601/99 dated 21.1.2000 (Geethanjali Case) wherein it is held that additional sale tax was adopted for the taxable turnover up to 31.7.96 i.e. from 1.4.96 to 31.7.96. The Government have also in their No.1591/D2/99-8 dated 25.5.2000 instructed to work out the levy of additional sales tax as per the amended provisions only from 1.8.96 and the earlier provisions for the period up to 31.7.96, the Commissioner of Commercial Taxes also had issued clarification in Ref. BD3/88803/96 dated 31.7.2000 in this regard. The Tribunal also has in its decision rendered in 661, 662, 645, 646 dated 6.11.2000 upheld the levy of AST for the period from 1.4.96 to 31.7.96." 13. In support of the grounds, the Joint Commissioner, Coimbatore has contended that the Appellate Tribunal failed to appreciate that the Additional Sales Tax is leviable for the period from 01.04.1996 to 31.07.1996, since the turnover exceeded ten lakhs. The Tribunal failed to consider that enhancement of exemption from....
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....le turnover exceeds ten crores of rupees, but does not exceed twenty five crores of rupees : 1% of the taxable turnover (i-a) Where the taxable turnover exceeds twenty five crores of rupees, but does not exceed fifty crores of rupees : 1.5 percent of the taxable turnover (ii) Where the taxable turnover exceeds fifty crores of rupees, but does not exceed one hundred crores of rupees : 2 percent of the taxable turnover (iii) Where the taxable turnover exceeds one hundred crores of rupees, but does not exceed three hundred crores of rupees : 2.5 percent of the taxable turnover (iv) Where the taxable turnover exceeds three hundred crores of rupees : 3 percent of the taxable turnover Explanation I : 'Taxable Turnover' for the purpose of this clause in respect of a principal selling or buying goods [...] through agents shall be the aggregate taxable turnover of all his agents relating to the sale or purchase of the goods of such principal within the State. Explanation II : Notwithstanding anything contained in the said Act, for the purpose of this clause, 'turnover' in respect of sugarcane excluding sugarcane setts shall ....
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....e above preamended Section 2(1)(a) and the amended Section 2(1)(a) and 2(1)(aa) as well as striking down of the provisions to the extent referred to in the above judgment of the Special Tribunal, the question to be considered is as to in what manner the additional sales tax liability of the respondentassessee is to be determined." Both amended and unamended provision, extracted in the above reported case, is extracted hereunder: "3. In order to appreciate the contentions raised, it is better to note the un-amended provision as well as the amended provisions and the provision as it stands after the judgment of the Special Tribunal. 4. Section 2(1)(a) as it originally stood reads as under:- "Levy of additional tax in the case of certain dealers:- (1) (a) The tax payable under the Tamil Nadu General Sales Tax Act, 1959 (Tamil Nadu Act 1 of 1959) (hereinafter in this section referred to as the said Act), shall, in the case of a dealer whose taxable turnover for a year exceeds ten lakhs of rupees, be increased by an additional tax calculated at the following rates, namely:- Rate of tax (i) Where the taxable turnover exceeds ten lakhs of rupees but ....
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....able turnover; (ii) Where the taxable turnover exceeds three hundred crores of rupees 3 per cent of the taxable turnover Explanation:- 'Taxable turnover' for the purpose of this clause in respect of a principal selling or buying goods in this State through agents shall be the aggregate taxable turnover of all his agents relating to the sale or purchase of the goods of such principal within the State." In the above reported case, the Hon'ble Division Bench considered the decision of the Special Tribunal in Siemens Limited v. State of Tamil Nadu reported in Vol. 110 (1998) S.T.C. 313, as follows: "To give effect to the said intention we proceed to hold that clause (a) of sub-section (1) of Section 2 of the Principal Act, namely, Act 14 of 1970 is ultra vires and should stand deleted. We make it clear that we are striking down only clause (a) of Section 2(1). We also make it clear that under Section 2(2) and 2(3) the intention of the Legislature not to pass on the burden of additional sales tax to the consumers and the reference to prosecution, shall stand unaltered. So far as Section 2(1)(aa) as amended by Tamil Nadu Act 31 of 1996, the follo....
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....riod up to 31.3.1997, as the turnover of the respondent - assessee did not exceed rupees one hundred crores, there would be no liability of additional sales tax on the respondent - assessee. He further contended that assuming that the liability could be bifurcated for the period up to 31.7.1996 and for the period subsequent to 1.8.1996, the order of the Assessing Authority not having applied the unamended provision namely, Section 2(1)(a) as it originally stood, by not deducting the first ten lakhs of rupees in the taxable turnover, to that extent, the order of the Assessing Authority was liable to be interfered with. 11. Though the learned counsel admitted the contention that the notification came to be issued by which the amended Section 2(1)(a) was given effect to only from 21.6.1999 and therefore by virtue of the said notification, the applicability of Section 2(1)(a) prior to its amendment and Section 2(1)(a) after its amendment has to be re-examined, we are of the view that such a question does not arise for consideration here, inasmuch as, we are concerned with the assessment year 1996-97 and with reference to the said assessment year, it was never in dispute that t....
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....e increased by an additional sales tax at the rate of 1.5%; where the taxable turnover exceeded one crore of rupees upto five crores of rupees, it is 2% ; where it exceeded five crores of rupees up to ten crores of rupees, at the rate of 2.25%; where it exceeded ten crores upto 300 crores of rupees at the rate of 2.5% and where it exceeded 300 crores of rupees at the rate of 3%. However, no additional tax could be levied for the first ten lakhs of rupees. 15. Having regard to the impact made in the amended provision, as per the judgment of the Special Tribunal in Siemens' case on and after 1.8.1996, the payment of additional sales tax would arise only if the taxable turnover for the whole of the financial year exceeded one hundred crores of rupees and even in such a situation, while for the period up to 31.7.1996, the liability will have to be worked out as per the provision which was prevailing upto that date namely, the unamended Section 2(1)(a) and that for the period subsequent to 1.8.1996 up to 31.3.1997 for the taxable turnover generated on and after 1.8.1996 alone, the applicable rate of tax will have to be calculated. 16. To make the position more clea....