2017 (5) TMI 1610 - HC - VAT and Sales Tax

Whether the purchase of horn meal and hoof meal and consequential export thereof is exempted from levy of tax in terms of Section 5(3) of the Central Sales Tax, 1956? Held that - The very same issue decided in the case of State of Tamil Nadu Versus Lanka Traders Bone Mills 2017 (5) TMI 1609 - MADRAS HIGH COURT , where it was held that the Tribunal were fully justified in holding that the respondent dealer is entitled for the benefit of exemption under Section 5(3) of the Act, apart from the fact that the Tribunal, on facts, in earlier case, has held that the bone meal and horn meal are Organic manures. Tax case revision dismissed.

Summary

Issues:
- Whether the purchase of horn meal and hoof meal and consequential export is exempted from tax under Section 5(3) of the Central Sales Tax Act, 1956.

Analysis:
The case involved Tax Revision cases filed by the Revenue challenging orders passed by the Tamil Nadu Sales Tax Appellate Tribunal regarding the exemption of horn meal and hoof meal purchase and export from tax under Section 5(3) of the Central Sales Tax Act, 1956. The respondent claimed exemption as the goods were purchased for export and actually exported, fulfilling the criteria under Section 5(3). The respondent cited previous judgments and the nature of the product as organic manure to support their claim. The Revenue argued that the product was not solely used as manure, thus not qualifying for exemption. The Appellate Assistant Commissioner and the Tribunal allowed the appeals, considering the purchases were for export. The Tribunal held that the respondent dealers were entitled to exemption as exporters. The Revenue challenged this in the High Court, questioning the nature of the product and the intermediary process involved in manufacturing. The Court analyzed the facts and referred to the Supreme Court decision, emphasizing the fulfillment of criteria for exemption under Section 5(3) in the case. The Court upheld the Tribunal's order, dismissing the Tax Case Revisions, as no question of law arose for consideration.

In conclusion, the High Court upheld the Tribunal's decision, dismissing the Tax Case Revisions, as the respondent fulfilled the criteria for exemption under Section 5(3) of the Central Sales Tax Act, 1956. The Court emphasized the fulfillment of parameters for export sale and the nature of the product as organic manure. The judgment highlighted the factual position and previous decisions supporting the respondent's claim for exemption. The Court's analysis focused on the legal criteria and previous judicial interpretations to determine the validity of the exemption claim, ultimately affirming the Tribunal's decision.