2013 (6) TMI 700 - HC - VAT and Sales Tax

Summary

Issues involved: Interpretation of section 3B of the Tamil Nadu General Sales Tax Act, 1959 in relation to the use of dyes in works contract of dyeing for assessment year 1994-95.

Summary:

The Madras High Court addressed a tax case revision initiated by the Revenue against the Tribunal's order regarding the assessment year 1994-95. The substantial question of law raised was whether the Tribunal was correct in ruling that there was no transfer of property involved in the use of dyes in a works contract of dyeing, and therefore not assessable u/s 3B of the Tamil Nadu General Sales Tax Act, 1959.

The assessee, engaged in the job-work of dyeing yarn, had purchased dyes and chemicals through inter-State transactions. The court referred to a previous case where a similar issue was considered, and it was determined that there was a transfer of goods involved in works contracts under section 3B of the Act. Given that the assessee had procured dyes and chemicals through inter-State transactions, the court found in favor of allowing the tax case revision. Consequently, the Tribunal's order was overturned, and the tax case revision was allowed without any costs incurred.