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2023 (3) TMI 631 - HC - VAT and Sales TaxWorks contract of the Tyre Retreading Division - expenses incurred for payment of labour charges and other labour related charges like, P.F., F.P.F., and E.S.I etc. (tyre division) - Permissible deduction under Section 3-B(2)(e) of the TNGST Act, 1959 or not - HELD THAT - The non-production of supporting document is a question of fact and not a question of law as claimed by the revision petitioner. Nowhere the authorities have declined the entitlement of exemption of the expenses incurred towards labour or incidental charges. They have only pointed out the absence of supporting document from the assessee, the request to grant exemption is untenable. This Court finds no error in the said reasoning, since no substantial question of law involved in this Tax Case Revision, this Tax Case Revision is dismissed.
Issues Involved:
1. Interpretation of Section 3-B(2)(e) of the TNGST Act, 1959 regarding deductions for expenses incurred in a tyre service division. 2. Disallowance of exemption sought for labour charges and other related charges under Section 3(b) of the Act. 3. Admissibility of documents at different stages of appeal. 4. Determination of substantial question of law regarding eligibility for deduction under Section 3-B(2) of the Tamil Nadu General Sales Tax Act, 1959. Issue 1: Interpretation of Section 3-B(2)(e) of the TNGST Act, 1959 The petitioner, engaged in body building of auto parts and re-trading of tyres, challenged the refusal to deduct expenses incurred for labour and other related charges in the rubber division of the tyres service division. The petitioner argued that under Section 3-B(2) of the Act, expenses towards labour and incidental charges in works contracts should be exempt from tax. The appellate authority dismissed the appeal without considering the petitioner's explanation, leading to the need for interference. Issue 2: Disallowance of Exemption for Labour Charges The petitioner, operating three divisions including a tyre service division, sought exemption for expenses amounting to Rs.11.18 Lakhs incurred for labour charges and related costs. Despite the exemption request under Section 3(b) of the Act, the assessment officer, Appellate Authority, and Tribunal refused to grant the exemption, prompting the Tax Case Revision. Issue 3: Admissibility of Documents at Different Stages The Tax Case Revision was initially filed before the Special Tax Appellate Tribunal and later transferred to the High Court upon the Tribunal's abolition. The Court admitted the Revision, formulating a substantial question of law regarding the eligibility for deduction under Section 3-B(2) of the Act in the context of the Tyre Retreading Division. The Tribunal refused to entertain documents produced at the second appeal stage that were not submitted during assessment or before the Appellate Authority. Issue 4: Determination of Substantial Question of Law The Court, after hearing arguments from both parties, analyzed the facts and found that the petitioner failed to provide necessary documentary evidence to support the claim that expenses were related to labour charges. The Appellate Assistant Commissioner's findings highlighted the lack of proof provided by the petitioner at various stages of appeal. As the authorities did not reject the entitlement of exemption but emphasized the absence of supporting documents, the Court upheld the lower authorities' decisions, dismissing the Tax Case Revision for lack of substantial legal questions and confirming the orders of the Appellate Assistant Commissioner and the Tribunal.
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