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2018 (3) TMI 817 - HC - VAT and Sales TaxLevy of tax - the Assessing Authority found that the dealer has exported finished goods after using raw materials purchased against Form XVII and therefore, the Assessing Authority levied tax under Section 3(4) of the TNGST Act on a turnover of ₹ 1,06,000/- at the rate of 1% - Held that - Following the decision of this Court in Tube Investment of India Ltd., v. State of Tamil Nadu 2010 (10) TMI 938 - MADRAS HIGH COURT , the Appellate Tribunal by its order dated 19.05.2014 allowed the appeal filed by the dealer stating that since the export sale is fully covered by the definition of sale under Section 2(n) read with Explanation 3(a) of the TNGST Act, the Assessing authority cannot levy tax under Section 3(4) of the Act - revision dismissed.
Issues:
Appeal against order of Tamil Nadu Sales Tax Appellate Tribunal regarding levy of tax on export sale under TNGST Act, 1959. Analysis: The case involved a dealer in PVC hoses and PVC Resins whose turnover was determined for the assessment year 2002-03. The Assessing Authority found that the dealer exported finished goods after using raw materials purchased against Form XVII and levied tax under Section 3(4) of the TNGST Act on a turnover of ?1,06,000 at the rate of 1%. The dealer filed an appeal against this before the Appellate Assistant Commissioner, who dismissed the assessment under Section 3(2). Subsequently, the dealer appealed to the Tamil Nadu Sales Tax Appellate Tribunal, which allowed the appeal based on the definition of sale under Section 2(n) read with Explanation 3(a) of the TNGST Act, stating that the Assessing authority cannot levy tax under Section 3(4) of the Act on export sales. The substantial questions of law raised in the instant Tax Case (Revision) included the interpretation of the expression "does not sell the goods so manufactured" in Section 3(4) of the Act, the invocation of the principle of situs for interpreting the said expression, the distinction from a judgment of the Supreme Court regarding export sales, the levy of tax on export sales and its compliance with Article 286 of the Constitution, the scope of the expression "in any other manner" under Section 3(4), and the nature of sections 3(3) and 3(4) as charging provisions under the Act. The Tribunal's decision was based on precedents and the interpretation of relevant provisions of the TNGST Act. The High Court, following previous decisions, dismissed the instant Tax Case (Revision) based on the principles established in Tube Investment of India Ltd. v. State of Tamil Nadu, holding that the substantial questions of law were answered against the Revenue. The Court emphasized that the TNGST Act was enacted to levy tax on sales or purchases within the State of Tamil Nadu, as evident from the legislative intent. Consequently, the appeal against the Tribunal's order was rejected, and no costs were awarded.
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