9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (4) TMI 1218 - HC - VAT and Sales TaxRevision of assessment order - levy of additional sales tax - synthetic woven fabric - the turnover was assessed treating the synthetic woven fabric as plastic product - assessee claimed that the goods sold by the respondent-assessee are synthetic woven fabric and hence, they are eligible for exemption - whether assessee is liable to tax exemption or not? - Held that - Tax exempted goods, listed in Schedule III of Tamil Nadu General Sales Tax Act, 1959, include tobacco, sugar, cotton and woolen fabrics, handloom cloth and few other commodities. Besides, conditional exemption, effected through special notifications, is also accorded to the sale/purchase of a number of goods by certain persons or institutions. In M/s. A. R. Plastic Pvt. Ltd., Gurgaon v. State of Haryana 2015 (10) TMI 210 - PUNJAB & HARYANA HIGH COURT , the Punjab and Haryana High Court, while considering the question, as to whether in the facts and circumstances of the present case, HDPE/PP Woven Fabric is Artificial silk and therefore falls within the ambit of Entry 51 of Schedule B of Haryana VAT Act, 2003, held that HDPE woven fabric falls within entry 51 of Schedule B of Haryana VAT Act, 2003 and is exempted from payment of tax. Both the appellate authority and the Tribunal have analyzed the facts to arrive at a conclusion in favor of the assessee. In fact, the Assessing Officer himself has allowed exemption, on sale of goods in question in the previous years and subsequently also, which the Tribunal has taken note of - The Tribunal has rightly held that the sale of synthetic woven fabric, would fall under item 8(ii) of Part A of Third Schedule and eligible for exemption. Tax case revision dismissed - decided against Revenue.
Issues Involved:
1. Classification of synthetic woven fabric as plastic product. 2. Eligibility for tax exemption under the Tamil Nadu General Sales Tax Act, 1959. 3. Applicability of the Commissioner of Commercial Taxes' clarification. 4. Consistency in tax treatment across different assessment years. Detailed Analysis: 1. Classification of Synthetic Woven Fabric as Plastic Product: The primary issue revolved around whether synthetic woven fabric should be classified as a plastic product, thus subject to taxation. The Assessing Officer initially assessed the turnover by treating synthetic woven fabric as a plastic product under Entry 33-A of Part-C of the First Schedule. However, the Appellate Assistant Commissioner (CT)-I, Chennai, and subsequently the Tamil Nadu Sales Tax Appellate Tribunal, disagreed with this classification. They determined that synthetic woven fabric should not be considered a plastic product but rather as an exempted good under Item 8(ii) of Part A of the Third Schedule. The Tribunal emphasized that the Commissioner’s clarification regarding HDPE woven fabric and monofilament tape did not apply to synthetic woven fabric. 2. Eligibility for Tax Exemption Under the Tamil Nadu General Sales Tax Act, 1959: The respondent-assessee argued that synthetic woven fabric is exempt from tax under the Tamil Nadu General Sales Tax Act, 1959. The Appellate Assistant Commissioner and the Tribunal supported this view, noting that synthetic woven fabric falls under Item 8(ii) of Part A of the Third Schedule, which lists tax-exempt goods. The Tribunal confirmed that the goods sold by the respondent-assessee were indeed synthetic woven fabric and thus eligible for exemption. 3. Applicability of the Commissioner of Commercial Taxes' Clarification: The State's appeal relied heavily on the Commissioner of Commercial Taxes' clarification, which categorized HDPE woven fabric and monofilament tape as plastic products. However, both the Appellate Assistant Commissioner and the Tribunal found that this clarification did not pertain to synthetic woven fabric. The Tribunal stated that the clarification could not be the basis for classifying synthetic woven fabric as a plastic product, as the goods in question were different from those mentioned in the Commissioner’s clarification. 4. Consistency in Tax Treatment Across Different Assessment Years: The Tribunal noted that the Assessing Officer had allowed tax exemption for the sale of synthetic woven fabric in previous and subsequent assessment years. This consistency in tax treatment bolstered the respondent-assessee’s argument for exemption. The Tribunal found no compelling reason to deviate from this established practice, reinforcing the decision to exempt synthetic woven fabric from taxation. Conclusion: The High Court upheld the Tribunal's decision, confirming that synthetic woven fabric should not be classified as a plastic product and is eligible for tax exemption under Item 8(ii) of Part A of the Third Schedule of the Tamil Nadu General Sales Tax Act, 1959. The court dismissed the State's appeal, finding no manifest illegality in the Tribunal's order and answering the substantial question of law against the revenue.
|
