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2017 (12) TMI 1425 - HC - VAT and Sales TaxLevy of tax - Whether the export sale will also be a sale which does not attract the levy of tax under Section 3(4) of the Act? - Held that - similar issue decided in the case of Tube Investments of India Ltd. (Formerly known as M/s. TI Diamond Chain Ltd.) Versus The State of Tamil Nadu, represented by the Commercial Tax Officer 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 - tax revision dismissed.
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 the purpose of interpretation of the expression "does not sell the goods so manufactured" in sub Section (4) of Section 3 of the Act. 3. Distinction of judgment in the case of State of Karnataka vs. B.M.Ashraf & Co. regarding sale deemed to be in the course of export. 4. Construction of levy of tax under Section 3(4) as a direct levy on export sale and its compliance with Article 286 of the Constitution. 5. Inclusion of export sale within the expression "in any other manner" under sub Section (4) of Section 3. 6. Understanding of sections 3(3) and 3(4) as not being charging provisions. 7. Consideration of the scope of Tamil Nadu General Sales Tax Act, 1959 in levying tax only on sales or purchases within the State of Tamil Nadu. Issue 1: The case involved the 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. The tribunal allowed the appeal filed by the respondent based on the decision in Tube Investment of India Ltd. v. State of Tamil Nadu, which held that export is also a sale under Section 3(4). The State challenged this interpretation as it pertained to both intra-state and export sales. Issue 2: The Appellate Tribunal invoked the principle of situs for interpreting the expression "does not sell the goods so manufactured" in sub Section (4) of Section 3. This involved considering the applicability of explanation 3(a) to Section 2(n) of the Act to bring the interpretation within its ambit. The State questioned the correctness of this application. Issue 3: A legal question arose regarding the distinction made by the Appellate Tribunal in the judgment of State of Karnataka vs. B.M.Ashraf & Co. The Tribunal's interpretation of a sale deemed to be in the course of export under Section 5(3) of the Central Sales Tax Act, 1956, in relation to an interstate sale was challenged. Issue 4: The correctness of the Appellate Tribunal's construction of the levy of tax under Section 3(4) as a direct levy on export sale was questioned in light of Article 286 of the Constitution. The State contended that such a levy contravened constitutional provisions. Issue 5: The Appellate Tribunal's interpretation of the expression "in any other manner" under sub Section (4) of Section 3 was challenged concerning the inclusion of export sale within its scope. The State raised concerns about the Tribunal's understanding of this provision. Issue 6: A question arose regarding the understanding of sections 3(3) and 3(4) of the Tamil Nadu General Sales Tax Act, 1959, as not being designed as charging provisions. The Tribunal's interpretation was questioned based on the non-obstante clause in Section 3(3) of the Act. Issue 7: The scope of the Tamil Nadu General Sales Tax Act, 1959, in levying tax solely on sales or purchases within the State of Tamil Nadu was considered. The State argued that the Tribunal failed to consider the legislative intent behind the Act, as evident from the pre-factory explanation. The judgment dismissed the Tax Case (Revision) based on the precedent set in Tube Investment of India Ltd. v. State of Tamil Nadu, emphasizing consistency in legal interpretation.
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