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1991 (2) TMI 392 - HC - VAT and Sales Tax
Issues: Assessment under Tamil Nadu General Sales Tax Act, 1959 and Central Sales Tax Act, 1956 for the years 1973-74 and 1974-75.
Tamil Nadu Sales Tax Act Assessment (1973-74): The petitioners were initially assessed on a total and taxable turnover, but it was later discovered that they had sold auto cables along with PVC cables. The assessing officer reclassified the sales of auto cables and imposed a higher tax rate of 13% under a specific entry. However, the Tribunal found that the PVC cables were to be taxed as electrical goods under a different entry, and not as parts and accessories of motor vehicles. The Tribunal concluded that the revenue authorities erred in dividing the PVC cables for tax purposes and upheld the original assessment. Central Sales Tax Act Assessment (1973-74): The petitioners were assessed under the Central Sales Tax Act on a total and taxable turnover, with different tax rates applied based on the type of turnover. Similar to the Tamil Nadu Sales Tax Act assessment, the Tribunal found that the PVC cables should be taxed as electrical goods and not as parts and accessories of motor vehicles. The Tribunal held that the reassessment at a higher rate was not justified, affirming the original assessment. Tamil Nadu Sales Tax Act Assessment (1974-75): In this year, PVC cables were initially taxed at 9%, but a portion of the turnover was later brought to tax at 13%. The dispute before the Tribunal centered on whether the PVC cables sold to automobile parts dealers should be taxed under a specific entry. The Tribunal determined that the PVC cables were to be taxed as electrical goods and not as parts and accessories of motor vehicles, maintaining the original assessment. The Tribunal correctly held that the revenue authorities erred in attempting to tax the PVC cables differently based on their use in automobile wiring. The Tribunal's decision to uphold the original assessments and dismiss the petitions was deemed justified, with no costs awarded.
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