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1989 (12) TMI 335 - HC - VAT and Sales Tax

Issues Involved:

1. Whether the sago and tapioca products sold by the assessee are "packed" and sold under a brand name as contemplated under item 103 of the First Schedule to the Tamil Nadu General Sales Tax Act, 1959.
2. Whether the deletion of the word "packed" by the Tribunal from its order was appropriate.
3. Whether the assessee's sales of sago products in gunny bags fall under item 103 of the First Schedule.

Issue-wise Detailed Analysis:

1. Whether the sago and tapioca products sold by the assessee are "packed" and sold under a brand name as contemplated under item 103 of the First Schedule to the Tamil Nadu General Sales Tax Act, 1959:

The primary question was whether the sago and tapioca products sold by the assessee were "packed" and sold under a brand name, thus falling under item 103 of the First Schedule. The assessee contended that the products were purchased in gunny bags from registered dealers and sold in the same condition without any additional packing, merely affixing a brand name on the sale bill. The argument was that such sales should not be considered as "packed" under item 103, which requires a special kind of packing like "tinned, canned, bottled or packed." The court noted that the word "packed" should be interpreted in the context of preservation, transport, and sale, not mere wrapping or bundling. This interpretation was supported by the decision in T.C. No. 1681 of 1977 (White Field Ice-Cream, Bakery and Coffee House v. State of Tamil Nadu), which held that mere wrapping or bundling does not constitute "packed" as contemplated under item 103.

2. Whether the deletion of the word "packed" by the Tribunal from its order was appropriate:

The Tribunal had deleted the word "packed" from its observation, acknowledging the assessee's claim that the products were sold in the same gunny bags without additional packing. The court observed that if the word "packed" was deleted, there was no evidence to show that the assessee had done any packing as required under clause (a) of item 103. The deletion was appropriate as it aligned with the assessee's contention and the Tribunal's acknowledgment that the products were sold in the same condition as purchased.

3. Whether the assessee's sales of sago products in gunny bags fall under item 103 of the First Schedule:

The court applied the principle of noscitur a sociis, interpreting "packed" in the context of "tinned, canned, bottled," meaning packing for preservation, transport, and sale. The court concluded that the assessee's sales of sago products in gunny bags did not meet this criterion. The Supreme Court's decision in Alladi Venkateswarlu v. Government of Andhra Pradesh supported this view, emphasizing that taxing statutes should not be interpreted to impose multiple taxes on the same product in different forms unless explicitly clear. The court found no grounds to interfere with the Tribunal's order, which had allowed the rectification by deleting the word "packed."

Conclusion:

The court allowed the assessee's revisions (T.C. Nos. 989 to 991 of 1979) and deleted the disputed turnover from the taxable turnovers. The revision filed by the Revenue (T.C. No. 1245 of 1980) was dismissed, affirming that the sales of sago products in gunny bags did not attract item 103 of the First Schedule. No order as to costs was made.

 

 

 

 

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