2002 (9) TMI 832 - AT - VAT and Sales Tax

Summary

Issues:
- Interpretation of section 3(4) of the Tamil Nadu General Sales Tax Act, 1959 regarding levy of sales tax on goods purchased against concessional rate for export
- Validity of clarifications issued by the second respondent under section 28-A of the Act
- Applicability of previous court decisions on similar matters to the current case

Analysis:

Issue 1: Interpretation of Section 3(4) of the Act
The petitioners contended that there should be no levy of sales tax under section 3(4) of the Act for goods purchased against concessional rates under section 3(3) if those goods were used for manufacturing within the State and subsequently sold by way of export. However, the Tribunal analyzed the provision of section 3(4) which mandates a two percent tax on goods dispatched outside the State for sale, irrespective of whether they are exported. The Tribunal concluded that the term "in any other manner" in the provision includes export sales, thereby upholding the levy of tax under section 3(4) for export sales.

Issue 2: Validity of Clarifications under Section 28-A
The petitioners challenged the clarifications issued by the second respondent under section 28-A of the Act, arguing that the Appellate Assistant Commissioner relied on these clarifications to uphold the tax levy. The Tribunal referred to previous judgments where it was established that clarifications under section 28-A are valid and binding on parties seeking them. However, the Tribunal emphasized that the ultimate decision rests with the assessing officer or the Appellate Assistant Commissioner, who must independently evaluate the arguments presented before them.

Issue 3: Applicability of Previous Court Decisions
The Tribunal considered previous court decisions, such as the case of Elgi Equipments, which addressed similar matters regarding the levy under section 3(4) and clarifications under section 28-A. The Tribunal concurred with the views expressed in the previous judgment, thereby reinforcing the applicability of such decisions to the current case. Consequently, the Tribunal dismissed the original petition, stating that there was no requirement for the declaration sought by the petitioners.

In conclusion, the Tribunal upheld the levy of tax under section 3(4) for goods purchased against concessional rates and used for export sales, validated the clarifications issued by the second respondent under section 28-A, and relied on previous court decisions to support its judgment, ultimately dismissing the original petition.