2003 (5) TMI 483 - HC - VAT and Sales Tax

Summary

Issues:
1. Addition of 5% turnover of furniture for defects.
2. Denial of exemption for furniture sold to Cochin Export Processing Zone.
3. Denial of deduction for turnover relating to sales return.

Detailed Analysis:
1. The first issue pertains to the addition of 5% of the turnover of furniture for defects. The assessment authority had made this addition based on alleged irregularities in a transaction involving the purchase of steel furniture. The petitioner denied receiving the goods, leading to penalty proceedings under section 29-A(4) of the Act. Both the appellate authorities upheld the addition, with the Tribunal reducing it from Rs. 61,715 to Rs. 31,200. The petitioner argued that authorities should proceed against the consignor, citing legal provisions. However, the court found no reason to interfere with the findings, as the petitioner failed to provide evidence to support their denial of the transaction.

2. The second issue concerns the denial of exemption for furniture sold to Cochin Export Processing Zone. The petitioner claimed exemption under Notification S.R.O. No. 1177/87, which exempts tax on the sale of industrial inputs to industrial undertakings in the zone. The assessing authority denied the exemption, stating that furniture is not an industrial input. The petitioner argued that furniture falls under the category of "plant" as per S.R.O. No. 1727/93. The court noted that the matter requires fresh consideration as the assessing authority did not evaluate the claim based on subsequent notifications. Therefore, the court remanded the issue for reassessment in light of S.R.O. Nos. 1515/98 and 1727/93.

3. The final issue relates to the denial of deduction for the turnover of sales return. The Tribunal found that the petitioner did not provide any material or evidence to support this claim. The first appellate authority's order also lacked substantial contestation from the petitioner on this matter. Consequently, the court upheld the Tribunal's finding on this point, rejecting the petitioner's contentions regarding the deduction of sales return.

In conclusion, the court disposed of the tax revision case by rejecting the contentions on the addition and sales return issues while remanding the question of exemption based on specific notifications for fresh consideration by the assessing authority.