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2018 (8) TMI 450 - HC - VAT and Sales TaxExport sale - Section 3(4) of the Act - respondent had purchased goods against Form XVII declarations and used the same in the manufacture of goods which were sold outside the state - Held that - Identical set of facts decided in the case of Tube Investment of India Ltd., v. State of Tamil Nadu 2010 (10) TMI 938 - MADRAS HIGH COURT , where it was held that Section 3(4) of the Act will have no application since situs of the export sales of the petitioners for the purpose of said Section was the State of Tamilnadu and by virtue of the said factual position, the applicability of Section 3(4) stands excluded for the exigibility of tax - Revision dismissed - decided against Revenue.
Issues:
1. Interpretation of the expression "does not sell the goods so manufactured" in sub Section (4) of Section 3 of the Tamil Nadu General Sales Tax Act, 1959. 2. Invocation of the principle of situs for interpreting the expression "does not sell the goods so manufactured" in sub Section (4) of Section 3 of the Act. 3. Distinction of judgment in State of Karnataka vs. B.M.Ashraf & Co. regarding sale in the course of export. 4. Construction of levy of tax under Section 3(4) in the event of export sale and its compliance with Article 286 of the Constitution. 5. Inclusion of export sale under the expression "in any other manner" in Sub Section (4) of Section 3. 6. Understanding of Sections 3(3) and 3(4) as non-charging provisions. 7. Consideration of the scope of the Tamil Nadu General Sales Tax Act, 1959 in relation to sales or purchases within the State. Analysis: 1. The case involved a revision filed against an order passed by the Tamilnadu Sales Tax Appellate Tribunal regarding the assessment of a dealer who purchased goods against Form XVII declarations for manufacturing goods sold outside the state. The Assessing Officer calculated the liability under Section 3(4) of the Act based on the purchase value against Form XVII. The Tribunal allowed the dealer's appeal, stating that export constitutes a sale as per Section 3(4) of the Act, and the purchase turnover for export goods cannot be taxed under the same section. 2. The State raised substantial questions of law regarding the interpretation of the expression "does not sell the goods so manufactured" in Section 3(4) of the Act. The Tribunal's decision to include export sales within this provision was questioned, along with the invocation of the principle of situs for interpretation. The State also challenged the Tribunal's distinction from a Supreme Court judgment regarding sales in the course of export and the construction of tax levy under Section 3(4) in the context of export sales. 3. The Tribunal's decision was further scrutinized concerning the inclusion of export sales under the expression "in any other manner" in Section 3(4), the understanding of Sections 3(3) and 3(4) as non-charging provisions, and the scope of the Tamil Nadu General Sales Tax Act, 1959 in relation to sales or purchases within the State. Previous decisions by the High Court on similar issues were cited to support the dismissal of the Tax Case Revision filed by the State, concluding that the substantial questions of law were answered against the Revenue, with no costs awarded.
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