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1999 (11) TMI 843 - AT - VAT and Sales Tax
Issues:
1. Whether the sale of pulpwood by the assessee is taxable as multi-point goods. 2. Whether the nature of the commodity changed from timber to pulpwood, justifying a new tax levy. 3. Whether the logs of eucalyptus sold by the assessee should be treated as timber or pulpwood for taxation purposes. Analysis: Issue 1: The case involved a dispute regarding the taxation of the sale of pulpwood by the assessee. The Revenue contended that the pulpwood should be taxed as multi-point goods, citing various decisions to support their argument. The Revenue argued that the nature of the commodity had changed from timber to pulpwood, justifying a new tax levy. Issue 2: The learned Government Advocate argued that the logs of eucalyptus purchased by the assessee were converted into pulpwood for sale to the rayon industry, making it a new commercial product different from the original timber. The Government Advocate relied on legal precedents to support the levy of tax as multi-point goods on the pulpwood sold by the assessee. Issue 3: In response, the counsel for the assessee relied on a decision by the Andhra Pradesh High Court, contending that the character of the commodity remained the same even after conversion into planks and rafters. The counsel argued that the logs of eucalyptus sold by the assessee should be treated as timber and not as pulpwood for taxation purposes, as the essential character of the commodity did not change. The Appellate Tribunal, after considering the arguments presented by both sides, upheld the claim of the assessee regarding second sales and set aside the assessment order. The Tribunal found that the logs of eucalyptus sold by the assessee were to be taxed as single point goods under entry 84 of the First Schedule, and therefore, the taxing authorities were not entitled to treat the commodity as multi-point goods and levy tax again. Consequently, the Tribunal dismissed the revision, affirming the correctness of its decision and ordering the punctual execution of the order.
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