9911796707
TMI Blog1998 (4) TMI 484X X X X Extracts X X X X X X X X Extracts X X X X ..... to be reproduced in extenso: "In the reference first cited, it was clarified that since the first sales of ferrous scrap by the Tamil Nadu Electricity Board are exempt from tax, no tax is leviable on the subsequent local sales of the scraps purchased from the Tamil Nadu Electricity Board. This clarification was reiterated in the reference second and third cited in individual cases. These clarifications were issued on the basis of T.A. No. 240 of 1986 dated September 30, 1988 in the case of India Metal Industries v. State of Tamil Nadu. But the High Court, Madras in the case of Vasu General Traders v. State of Tamil Nadu [1987] 66 STC 358 held that since the exemption in relation to a particular sale would not be available to other subsequ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ances stated it is held that when a person purchases scrap from the Tamil Nadu Electricity Board and sells, he is effectively the first seller liable for tax. This may be earlier purchase tax under section 7A of the Tamil Nadu General Sales Tax Act, 1959 on this further sale depending on what that purchaser is doing with scraps. At any rate, it can no longer be considered second seller is not liable to tax. The Deputy Commissioners are requested to instruct the assessing officers that from the date of issue of this clarification, they will have to do all fresh assessments under this clarification and they need not open old assessments already completed under the earlier clarification. 4.. The clarifications issued in this office reference ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Second Schedule requires payment of tax on iron and steel as therein described "at the point of first sale in the State". 5.. It is contended by learned counsel for the appellants/petitioners that iron and steel being declared goods, they are exigible only to single point tax and that at the point of first sale, having regard to the provisions of the Central and State Acts aforementioned. The circular under challenge has the effect of shifting the incidence of tax on iron and steel sold by the said Board to the second or subsequent sale. This is impermissible since it would offend the statutory provisions which provide for the levy of the tax only at the point of first sale. 6.. Learned counsel for the appellants/petitioners cited the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vy price burden to the consumer of declared goods." 8. Our attention was also drawn to the brief order of a Division Bench f the Andhra Pradesh High Court Obviously it refers to [1990] 78 STC 269 (State of A.P. v. Vikash Traders).- which is apposite to the facts before us. The relevant portion reads thus: "In these tax revision cases, we are concerned with groundnut, which is taxable at the last purchase point under the Andhra Pradesh General Sales Tax Act 1957. The assessees herein, the dealers, sold groundnut to exporters, who purchased the same within the State and exported it. The question is who is the last purchaser? Evidently the exporter is the last purchaser in the State. But that purchase is getting exempted from tax by virtue o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ute has to operate in respect of other sales, and the petitioner's sale becomes taxable being the first taxable sale inside the State." (Emphasis supplied) 10.. The judgment in the case of Vasu General Traders [1987] 66 STC 358 (Mad.) was followed in the case of Royal Steel [1992] 1 MTCR 580 wherein iron had been purchased by the assessee from the said Board. The High Court framed this question: "The question to be decided is whether the taxable sale was the one made by the assessee or it was by second sale and the first taxable sale was made by the Tamil Nadu Electricity Board. It is not disputed that the Tamil Nadu Elec- tricity Board was exempted by a statutory notification issued under section 17 of the Tamil Nadu General Sales Tax Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax, either by a general provision or a specific provision applicable to a class of seller, a particular seller or the goods sold may not be subjected to tax at either that point of first sale or any subsequent sale in the State. 13.. The Second Schedule of the State Act specifies the single point; it is "the point of first sale in the State". The first sale in the State was the sale by the said Board to the appellants/petitioners. That sale was exempt from tax by reason of the notification dated December 1, 1982 aforementioned. The iron and steel sold by the said Board to the appellants/petitioners was, therefore, not liable to tax either at the point of first sale or any subsequent sale in the State. 14.. There is no warrant for the em ..... X X X X Extracts X X X X X X X X Extracts X X X X
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