1996 (2) TMI 469 - HC - VAT and Sales Tax

Summary

Issues:
Interpretation of entry No. 41-E of the First Schedule to the Act for taxation purposes based on the assembly and sale of wet grinders, electric motors, and grinders separately.

Analysis:
The judgment delivered by the Madras High Court pertains to an appeal against an order passed by the Joint Commissioner of Commercial Taxes under section 37 of the Tamil Nadu General Sales Tax Act, 1959. The appellant/assessee contended that the tax assessment based on entry No. 41-E of the Act was not valid as they claimed to be selling electric motors and grinders separately, not as wet grinders. However, the Joint Commissioner found that the goods were sold together to consumers, indicating they were assembled into wet grinders before sale. The Joint Commissioner also noted that the appellant had purchased wet grinders with motors from registered dealers. The assessment was adjusted based on the profit margin, resulting in a revised taxable turnover for the appellant.

The appellant relied on a Division Bench decision in State of Tamil Nadu v. Suguna Agencies but the court distinguished the case, emphasizing that when an entity assembles electrical motors and grinders into a new commodity like an electrical wet grinder, it falls under entry No. 41-E for taxation purposes. The court rejected the appellant's claim that they were selling the components separately, as it was found that they assembled and sold them as wet grinders. Consequently, the court upheld the Joint Commissioner's order, stating that it did not warrant interference, and dismissed the appeal without costs.