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TaxTMI 
TaxTMI 
TaxTMI 
2025 (12) TMI 1458
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....ment have been framed. Since the issue that arises in all the writ petitions is one and the same, we pass a common order disposing all writ petitions. 2. The assessee is a dealer registered under the provisions of the Tamil Nadu General Sales Tax Act, 1959. Orders of assessment have been passed for the periods 2000-01 and 2001-02 accepting the returns filed under the provisions of the Act. In respect of the period 2000-01, the turnover was an amount of Rs. 22,30,43,235/-. The Tamil Nadu Additional Sales Tax Act, 1970 ('AST Act'), provides for the levy of additional sales tax setting out certain conditions on the basis of which such liability would stand triggered. 3. The threshold for triggering AST liability till September, 2001 was Rs. 25 crores, and hence for the period 2000-01, as the turnover was below the aforesaid threshold, the petitioner did not suffer any AST liability. The TNGST assessment was completed on such basis. As far as the period 2001-02 is concerned, an amendment was brought into the relevant provisions of the AST Act whereby the threshold for applicability was reduced from Rs. 25 crores to Rs. 10 crores with effect from 29.09.2001. 4. The sale....
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.... (ii) State of Tamil Nadu & Another v Sitalakshmi Mills Ltd & Others [(1973) 33 STC 200] (iii) Gwalior Ryan Silk MFG (WVG) Co., Ltd v The Assistant Commissioner of Sales Tax & Others [(1974) 33 STC 219] (iv) The State of Tamil Nadu v M.K.Kandasami & Others [(1975) 36 STC 191] (v) Janatha Expeller Company & Others v The Assistant Commissioner (Assessment), Sales Tax, Special Circle, Tiruchur [(1981) 49 STC 216] (vi) Govind Saran Ganga Saran v Commissioner of Sales Tax & Others [(1985) 60 STC 205] (vii) Assistant Commissioner (Assessment), Sales Tax v Janatha Expeller Company & Others [(1987) 64 STC 435] (viii) State of Tamilnadu v Wander Limited [(1990) 79 STC 421] (ix) Assistant Commissioner (Assessment) Sales Tax Special Circle Tiruchur v Janatha Expeller Co., & Others [(1991) 85 STC 105] (x) Pine Chemicals Ltd & Others v Assessing Authority & Others [(1992) 85 STC 432] (xi) Deputy Commissioner of Sales Tax v Ayesha Hosiery Factory (P) Ltd (Footnote Supra 1) (xii) Engine Valves Limited v Union of India (Footnote Supra 2) (xiii) Commissioner of Sales Tax, Jammu & Kashmir & Others v Pi....
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....by the assessee without levy of AST as the turnover falls below the threshold as stipulated under the TNAST Act. 13. The TNAST Act is a specific enactment that provides for the levy of additional tax in the case of certain dealers. Section 2(1)(aa) of the TNAST Act reads as follows:- 2. Levy of additional sales tax in the case of certain dealer: 2(1)(aa) 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 including the principal selling or buying goods through agents] whose taxable turnover for a year exceeds twenty-five crores of rupees, be increased by an additional tax, calculated at the following rates, namely:- Rate of Tax (i) Where the taxable turnover exceeds twenty-five crores of rupees but does not exceed fifty crores of rupees 1.5 per cent 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 b....
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....of sales of any goods in the course of inter-State trade or commerce made during any prescribed period 3 [and determined in accordance with the provisions of this Act and the rules made thereunder. 17. Section 6 of the CST Act deals with liability to tax on inter-State sales and states that, subject to the provisions contained in the CST Act, every dealer shall be liable to pay tax on the sales of all goods, barring certain stipulated goods, effected by him in the course of inter-State trade or commerce during any year on and from the date so notified. 18. Section 8 deals with 'The Rates of tax on sales in the course of interstate trade or commerce', and sub-section (2) of section 8 states that the tax payable by any dealer on his turnover insofar as the turnover or any part thereof relates to sale of goods in the course of inter-State trade or commerce not falling under sub-section (1), shall be at the rate applicable to the sale or purchase of such goods inside the appropriate State under the sales tax law of the State. 19. The petitioner is liable to tax in respect of inter-State sales at the rate of 12% under Entry 17/Part DD/Schedule I of the Act, that reads as follow....
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....particular rate of tax that automatically gets reflected in and had to be taken into consideration for finding the rate and the applicability of Section 8 (2-A) or Section 8 (2)(b) of Central Sales Tax Act. As already stated if instead of an Additional Sales Tax Act the legislature has simply amended the Kerala General Sales Tax Act by varying the rate automatically that will come in for consideration and application of the provisions of Section 8 (2)(b) and 8 (2-A) of the CST Act. For this purpose, amendment of the State Act is not considered as an amendment of the Central Sales Tax Act. But since the rate applicable to the intra-State sales at a particular point of time is a relevant of consideration for finding out the rates tax on inter-State sale the amendment of the State Act automatically has the effect of changing the rate provided under Section 8 of the Central Sales Tax Act. That is not to say that the Central Act is amended by the State Legislature. The rates of tax in certain cases under the Central Act are linked to the rates fixed under the local Acts and that is how the amendment of the local acts affects the rates under the Central Act. It is still the Central Act t....
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....ction is available even where the goods are exempted with reference to industrial unit and for a specified period, viz., period of five years from the date the relevant unit goes into production. In other words, the question is whether an exemption of the nature granted under Government Order No. 159 dated March 26, 1971 is an exemption available "only in specified circumstances or under specified conditions" within the meaning of the explanation to Section 8(2-A), as contended by the State or is it a case where the goods are exempt from the tax "generally" within the meaning of Section 8(2-A), as contended by the respondents-dealers? We are of the opinion that the respondents-dealers' contention cannot be accepted in view of the clear and unambiguous language of the subsection. 28. Answering the above issue in favour of the State, the Bench makes reference to the earlier judgements in Indian Aluminium Cables Ltd. (Foot Note Supra (37)). and International Cotton Corporation (P) Ltd. etc. etc. v. Commercial Tax Officer, Hubli and Ors. [1975 3 SCC 585] holds thus: 10. The idea behind Sub-section (2-A) of Section 8 of the Central Sales Tax Act, which we have analysed h....
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....d sold by it would not be entitled to exemption from tax. Indeed, the goods manufactured by that very unit would not be eligible for exemption if they are manufactured after the expiry of five years from the date it goes into production and/or sells them beyond the said period. The period of exemption may also vary from unit to unit depending on the date of commencement of production in each unit. For the above reasons, we are of the opinion that the exemption granted under the aforesaid government order does not satisfy the requirements of Section 8(2-A). 11. We may point out that this was also the view taken by this Court in two earlier cases. In Indian Aluminium Cables Ltd. v. State of Haryana the question was whether the poles and cables sold by the appellant therein to Delhi Electric Supply Undertaking were exempt from central sales tax by virtue of the fact that Section 5(2)(a)(iv) of the Punjab Sales Tax Act exempted "sales to any undertaking supplying electrical energy to the public under a licence or sanction granted or deemed to have been granted under the Indian Electricity Act, 1910, of goods for use by it in the generation or distribution of such energy" from ....
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....he Bench which decided the Pine Chemicals. (This Bench too comprised three learned Judges). It is, however, interesting to notice that when the above two decisions were brought to the notice of the Bench, it referred to the ratio of the said decisions but neither followed it nor made any attempt to distinguish it but proceeded to make it a basis for their decision notwithstanding the fact that the said ratio ran exactly counter to the one adopted by the Bench. The two decisions did not certainly support the interpretation adopted in the judgment under review. On the contrary, they and in particular the decision in Indian Aluminium, militated against the said interpretation. It is for this reason, coupled with the fact that the interpretation placed in the judgment under review on Section 8(2-A) may affect a large number of cases all over the country, that we agreed to re-examine the issue, which we would not have agreed to ordinarily. 29. The above school of thought was carried forward subsequently, and in A Infrastructure (Foot Note Supra (21)), the Court holds as follows:- 20. On an analysis of the scheme of the Act, it is manifest that there is difference between exe....
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....he Revenue. This does not appear to be correct in that, the Gujarat Sales Tax Act contains Section 4A, entitled 'levy and collection from every dealer' stipulating that he shall be liable to pay tax under Sections 3 or 4 an additional tax on the sale or purchase of goods liable to tax under that Act at the rate of six paise in the rupee on sales tax, general tax or purchase tax or on any two or more of them, as the case may be. This decision is hence distinguishable in law. 32. As far as State of Tamil Nadu is concerned, the legislature has consciously not included AST within the ambit of general sales tax law. The enactment under which AST is levied is a specific enactment and the charging provision makes reference to general sales tax alone. We are hence inclined to accept the argument of the assessee that the levy under AST would be qua general sales tax only, and cannot be extended to inter-state transactions with liability under the CST Act. 33. Section 9(2) states that the mechanism for the levy of CST shall be as provided for under the TNGST Act, and sub-section 9(2) reads as follows:- 9. Levy and collection of tax and penalties.- ... (2) Sub....
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....mended thereafter to provide for the levy of interest. 36. Likewise, in the present case, till such time there is an amendment either to the TNAST or CST enactments, the interpretation of the revenue cannot be sustained. The impugned assessments and the consequential demands are hence quashed and barring W.P.No.22015 of 2007, all the above writ petitions are allowed. 37. As far as W.P.No.22015 of 2007 is concerned, the impugned clarification reads as follows:- Acts Cell III/43921/93 Office of the Special Commissioner and Commissioner of Commercial Taxes, Chepauk, Madras - 5 Dated 29.4.1993 Circular Sub: CST Act '56 - Scope of sec. 8(2)(a), - Sec. 8(2-A) of the CST Act '56- Inter-State sales not covered by "C" or "D" forms- Reckoning of tax along with surcharge, Addl. surcharge and Addl. sales tax-Certain instructions issued. Ref: 1. The Madras High Court's decision in W.P. No. 6448/91, dt. 6-4-93. 2. The Addl. Government Pleader (Taxes) D.O. Lr. No. 3026/93, dl. 13-4-93. 3. This office earlier clarification issued in Act Cell 111/100596/90, dt. 31-7-92 and 22-10-92. A batch of writ petitions filed ....