1963 (5) TMI 48 - HC - VAT and Sales Tax

Summary

Issues: Validity of sales tax order on disputed turnover for assessment year 1959-60. Interpretation of the term "bullion" for tax liability.

The High Court of Madras considered the validity of a sales tax order directing a firm to pay 2% sales tax on a disputed turnover for the assessment year 1959-60. The firm, dealing in gold, silver, and jewels, claimed exemption on a portion of their turnover. The assessing authority concluded that the firm's sale of a mixture of gold and copper did not qualify as "bullion," making them liable to pay tax at 2% on the turnover. The Appellate Assistant Commissioner and the Sales Tax Appellate Tribunal upheld this decision, citing precedents. The Tribunal defined bullion as only pure gold or silver for tax liability at a concessional rate. However, the Court analyzed various definitions and standards of bullion from sources like the Commercial Taxes Manual, legal dictionaries, and industry practices. The Court emphasized that bullion includes gold or silver mixed with other metals, not just pure forms. Referring to a Mysore High Court decision, the Court held that bullion encompasses various grades of gold alloys suitable for making jewelry, differing from the Andhra Pradesh High Court's interpretation. Consequently, the Court allowed the revision, supporting the firm's position and awarding costs.