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TMI Blog2010 (7) TMI 842X X X X Extracts X X X X X X X X Extracts X X X X ..... 1998) S.T.C. 313. The Tribunal struck down the amended Section 2(1)(a) and also deleted certain words in the newly inserted Section 2(1)(a) of the Tamil Nadu Act 31 of 1996. In the light of the above pre-amended Section 2(1)(a) and the amended Sections 2(1)(a) and 2(1)(aa) as well as striking down of the provisions to the extent referred to in the above judgment of the Special Tribunal, the question to be considered is as to in what manner the additional sales tax liability of the respondent- assessee is to be determined. 3. In order to appreciate the contentions raised, it is better to note the un-amended provision as well as the amended provisions and the provision as it stands after the judgment of the Special Tribunal. 4. Section 2(1)(a) as it originally stood reads as under:- "Levy of additional tax in the case of certain dealers:- [(1) (a) The tax payable under the Tamil Nadu General Sales Tax Act, 1959 (Tamil Nadu Act 1 of 1959) (hereinafter in this section referred to as the said Act), shall, in the case of a dealer whose taxable turnover for a year exceeds [ten lakhs of rupees], be increased by an additional tax calculated at the following rates, namely:- Rate of tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ii. Where the taxable turnover exceeds three hundred crores of rupees 3 per cent of the taxable turnover Explanation:- 'Taxable turnover' for the purpose of this clause in respect of a principal selling or buying goods in this State through agents shall be the aggregate taxable turnover of all his agents relating to the sale or purchase of the goods of such principal within the State." 6. In Siemens case, the Special Tribunal passed the following order: "To give effect to the said intention we proceed to hold that clause (a) of sub-section (1) of Section 2 of the Principal Act, namely, Act 14 of 1970 is ultra vires and should stand deleted. We make it clear that we are striking down only clause (a) of Section 2(1) . We also make it clear that under section 2(2) and 2(3) the intention of the Legislature not to pass on the burden of additional sales tax to the consumers and the reference to prosecution, shall stand unaltered. So far as section 2(1)(aa) as amended by Tamil Nadu Act 31 of 1996, the following words shall stand deleted, as obnoxious: (1) The words "in this State" after the words, "Principal selling or buying goods" in section 2(1)(aa) as well as in Explanati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icable in that year up to 31.7.1996 and for the period subsequent to 1.8.1996. 10. As against the above submission, learned counsel appearing for the respondent-assessee would contend that since as per the Act, the expression "year" refers to the whole of the financial year, when once Section 2(1)(a) came to be amended, the liability could be fastened only on a dealer, whose turnover exceeded one hundred crores of rupees and it is the case of the respondent - assessee that in the said financial year namely, the period up to 31.3.1997, as the turnover of the respondent - assessee did not exceed rupees one hundred crores, there would be no liability of additional sales tax on the respondent - assessee. He further contended that assuming that the liability could be bifurcated for the period up to 31.7.1996 and for the period subsequent to 1.8.1996, the order of the Assessing Authority not having applied the unamended provision namely, Section 2(1)(a) as it originally stood, by not deducting the first ten lakhs of rupees in the taxable turnover, to that extent, the order of the Assessing Authority was liable to be interfered with. 11. Though the learned counsel admitted the contentio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ales tax liability. 14. In the case on hand, having regard to the decision of the Special Tribunal in Siemens' case, the Additional Sales Tax liability upto 31.7.1996 is to be worked out based on the un-amended section 2(1)(a), which was prevailing upto that date. As per the provision as it stood as on 31.7.1996, in the case of a dealer whose taxable turn over in that financial year upto 31.7.1996 exceeded ten lakhs of rupees, upto one crore of rupees, his tax liability has to be increased by an additional sales tax at the rate of 1.5%; where the taxable turnover exceeded one crore of rupees upto five crores of rupees, it is 2% ; where it exceeded five crores of rupees up to ten crores of rupees, at the rate of 2.25%; where it exceeded ten crores upto 300 crores of rupees at the rate of 2.5% and where it exceeded 300 crores of rupees at the rate of 3%. However, no additional tax could be levied for the first ten lakhs of rupees. 15. Having regard to the impact made in the amended provision, as per the judgment of the Special Tribunal in Siemens' case on and after 1.8.1996, the payment of additional sales tax would arise only if the taxable turnover for the whole of the fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herwise. Consequently, the rate of tax applied viz., 2% was not in consonance with the statutory provision as was prevailing as on 31.7.1996. Since the taxable turnover did not cross Rs.100 crores during the said financial year, in the case of the respondent - assessee, the liability of additional sales tax will have to be calculated only for the period upto 31.7.1996 and not beyond and that too, on the taxable turnover that was available upto that date viz., 31.7.1996. 19. Having regard to the said position, the impugned order of the Tribunal as well as that of the Assessing Authority are liable to be set aside. While setting aside the order the Assessing Authority, we direct the Assessing Authority to pass fresh orders by keeping the taxable turnover of the respondent assessee upto 31.7.1996 in a sum of Rs.54,97,880/- and calculate the tax at the rate of 1.5% on the sum of Rs.44,97,880/- (i.e.), after deducting the first ten lakhs as provided under the proviso to sub-clause (i) of Section 2(1)(a). 20. The learned counsel for the respondent states that a Samadhan Scheme has been announced and prevalent as on date and the same will be in force upto 15.8.2010. The Assessing Author ..... X X X X Extracts X X X X X X X X Extracts X X X X
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