1999 (2) TMI 720 - Tri - VAT and Sales Tax

Summary

Issues Involved:
1. Levy of purchase tax on chillies under Section 7-A of the TNGST Act.
2. Levy of purchase tax on jaggery under Section 7-A of the TNGST Act.
3. Levy of penalty under Section 12(5)(iii) of the TNGST Act.

Issue-wise Detailed Analysis:

1. Levy of Purchase Tax on Chillies:
The primary issue was whether the levy of purchase tax at five percent on a turnover of Rs. 13,88,871 for chillies was sustainable under Section 7-A of the TNGST Act. The assessees argued that the sale to Allanasons (P) Ltd., Bombay, was a penultimate sale in the course of export against Form "H" and hence should not attract purchase tax. The Tribunal examined the sale bill, Form "H" certificate, bill of lading, and other documents, confirming that the sale to Allanasons was indeed in the course of export. However, the Tribunal noted that the omission of the phrase "in the course of export out of the territory of India" in Section 7-A(1)(c) of the TNGST Act was deliberate. Thus, even if the penultimate sale was in the course of export, the preceding purchase from non-dealers was liable for purchase tax under Section 7-A(1) of the TNGST Act. The Tribunal upheld the levy of purchase tax on the purchase turnover of chillies, rejecting the claim of the assessees.

2. Levy of Purchase Tax on Jaggery:
The second issue concerned the levy of tax at five percent on a turnover of Rs. 28,615 for the sale of jaggery. The assessees failed to produce sufficient proof, such as a bill of lading or Form "H" certificate, to substantiate that the sale of jaggery was for export. The Tribunal confirmed the findings of the lower authorities that the assessees were not eligible for exemption on this turnover and upheld the levy of tax at five percent.

3. Levy of Penalty:
The third issue was the sustainability of the penalty of Rs. 69,444, calculated at 100 percent of the tax due for the alleged wilful suppression of the turnover of chillies. The Tribunal noted that the assessees, being experienced exporters, knowingly suppressed the taxable purchase turnover. The Tribunal upheld the penalty, affirming the decision of the Appellate Assistant Commissioner to reduce the penalty from 150 percent to 100 percent of the tax due.

Conclusion:
The Tribunal dismissed both revisions, confirming the levy of purchase tax on chillies and jaggery and upholding the penalty for wilful suppression of turnover. The Tribunal emphasized that findings must be based on material facts and supported by documents, and in this case, the lower authorities' findings were consistent with the records produced. The Tribunal ordered that the judgment be executed punctually by all concerned.