2000 (7) TMI 954 - AT - VAT and Sales Tax

Summary

Issues:
Whether "ghova" is a different commodity from milk for the purpose of tax levy and penalty under section 12(5)(iii) of the Tamil Nadu General Sales Tax Act, 1959.

Analysis:
The case revolves around the classification of "ghova" as a distinct commodity from milk for tax assessment. The petitioner argued that ghova is merely a condensed form of milk and should be exempt from tax. The analytical reports presented by the petitioner compared the ingredients of milk and ghova to support this claim. However, the Government Advocate contended that the Appellate Tribunal correctly determined ghova as a separate commercial commodity, ineligible for exemption under G.O.P. No. 1340 dated December 10, 1981. The tax levied under section 7-A of the Act was deemed appropriate by the Government Advocate, along with the penalty imposed for non-disclosure of turnover.

The Appellate Tribunal carefully examined the eligibility for exemption, emphasizing that only specific forms of milk products qualify for exemption under the relevant regulations. The Tribunal concluded that ghova, being a solid end-product derived from milk through a manufacturing process, does not meet the criteria for tax exemption as it is not sold as a beverage in liquid form. Moreover, since the purchases were made from non-dealers, the tax levy under section 7-A was upheld. The penalty imposed for failing to report the turnover in the return and pay the due tax was also deemed fair by the Tribunal.

The Tribunal affirmed that the findings of the Appellate Tribunal were correct in treating ghova as a different commercial commodity subject to taxation. The decision was supported by the interpretation of relevant laws and precedents, including the case of State of Tamil Nadu v. Mahalakshmi Textile Mills Ltd. The Tribunal found no grounds to interfere with the Appellate Tribunal's order, concluding that the tax revision case should be dismissed. The penalty of 50% of the tax due was considered reasonable and in accordance with legal principles.

In conclusion, the Tribunal upheld the classification of ghova as a separate commodity from milk, subject to taxation under the Tamil Nadu General Sales Tax Act, 1959. The decision was based on a thorough analysis of the ingredients, manufacturing process, and relevant legal provisions. The penalty imposed for non-compliance was deemed appropriate, and the overall judgment was in line with established laws and precedents.