1992 (7) TMI 325 - HC - VAT and Sales Tax

Summary

Issues:
1. Appeal against order of Joint Commissioner under section 37 of Tamil Nadu General Sales Tax Act, 1959.
2. Determination of tax liability on G.S. powder used in tanning hides and skins.

Analysis:
The appellant, engaged in the business of tanning hides and skins, contested the assessment of tax on the turnover of G.S. powder under entry 59 of the First Schedule to the Tamil Nadu General Sales Tax Act, 1959. The assessing authority initially fixed the turnover at Rs. 7,30,358, leading to an appeal by the assessee. The Appellate Assistant Commissioner remanded the case back to the assessing authority to determine if G.S. powder falls under entry 59. The assessing authority, after examination, concluded that since G.S. powder was predominantly used for tanning, it should be taxed under entry 59. However, the first appellate authority disagreed, stating that G.S. powder was not listed in the specified items under entry 59, leading to the setting aside of the assessment.

Upon further appeal, the Joint Commissioner exercised suo motu powers and determined that G.S. powder was akin to wattle bark and assessable under entry 59. The High Court, upon review, found that the revisional authority did not adequately consider the facts of the case. The Court emphasized that the Joint Commissioner's reliance on the predominant user theory was unfounded, as the specific items listed under entry 59 did not include G.S. powder. The Court criticized the lack of clarity in the previous orders and the insufficiency of evidence to support the Joint Commissioner's conclusion.

Consequently, the High Court set aside the Joint Commissioner's order and remanded the matter to the appellate authority for a thorough examination of whether G.S. powder fits within entry 59. The Court stressed the need for the appellant to be given a fair opportunity during the reassessment. No costs were awarded in this decision.