2012 (9) TMI 897 - HC - VAT and Sales Tax

Summary

Issues involved:
1. Sustaining ad hoc additions in assessment without reference to suppression or omission of sales or purchase turnover.
2. Tax liability on purchase turnover of old gold jewels under entry 3 of Part A of the First Schedule to the Tamil Nadu General Sales Tax Act.
3. Tax liability on old jewellery purchased and used in the manufacture of new jewellery under section 7A of the Tamil Nadu General Sales Tax Act.

Issue 1: Sustaining ad hoc additions in assessment without reference to suppression or omission of sales or purchase turnover:
The High Court noted that the old and worn-out jewellery made of gold or silver was taxable at the point of last purchase in the State. The Tribunal confirmed an ad hoc addition to the assessment due to the non-maintenance of a separate stock account for old and new jewellery purchases. Despite the assessee's argument against the ad hoc addition, the Tribunal upheld the assessment, emphasizing the lack of correct and complete seller information in the bought notes. Consequently, the Court found no grounds to interfere with the Tribunal's decision, leading to the dismissal of the tax case (revision).

Issue 2: Tax liability on purchase turnover of old gold jewels under entry 3 of Part A of the First Schedule to the Tamil Nadu General Sales Tax Act:
Regarding the tax liability on old gold jewels, the Tribunal determined that the purchase of old jewellery used in manufacturing new jewellery is subject to tax under section 7A of the Tamil Nadu General Sales Tax Act. The assessing authority assessed the disputed turnover at four per cent, and the Tribunal, based on this assessment, rejected the assessee's plea and confirmed the assessment. Consequently, the Court rejected the revision concerning this issue as well.

Issue 3: Tax liability on old jewellery purchased and used in the manufacture of new jewellery under section 7A of the Tamil Nadu General Sales Tax Act:
The Tribunal's decision on the tax liability of old jewellery purchased and utilized in creating new jewellery under section 7A of the Tamil Nadu General Sales Tax Act was upheld by the Court. The Tribunal's rejection of the assessee's plea due to the absence of a separate stock account for old and new jewellery purchases, along with incomplete seller information in the bought notes, led to the confirmation of the assessment. As this issue was deemed a question of fact, the Court found no justifiable reason to interfere with the Tribunal's order, resulting in the dismissal of the tax case (revision) without costs.