9911796707
TMI Blog1999 (11) TMI 843X X X X Extracts X X X X X X X X Extracts X X X X ..... ion Corporation for the sale of the timber. The respondent, thereafter, entered into an agreement with M/s. Gwalior Rayon Silk Manufacturing (Weaving) Co. Ltd., Kerala, for the sale of 1183.05 tonnes of pulpwood for a value of Rs. 11,67,588. The timber purchased from the Tamil Nadu Forest Plantation Corporation was cut into logs and after debarking and splitting, they were transported to Gwalior Rayon Silk Manufacturing Company. The Deputy Commercial Tax Officer levied tax for this turnover treating the commodity as pulpwood taxable at multi-point and also levied penalty under section 12(3)(b) of the Act, as returns were not submitted for the sale of pulpwood. As against this order, appeal was filed before the Appellate Assistant Commissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cial product different from the trees purchased by him from the Forest Plantation Corporation, and this new product is taxable as multi-point goods and the assessee is not entitled to claim second sales of the timber. As mentioned above, the respondent purchased the eucalyptus trees from the Tamil Nadu Forest Plantation Corporation treating the eucalyptus trees as timber and paid taxes under entry 84 of the First Schedule at 5 per cent single point tax. It is admitted by the assessee that they cut the trees and converted into logs and debarked them as they were sold for the manufacturers of rayon silk at Kerala. It appears that the agreement between the respondent-assessee and the purchaser, namely, Gwalior Rayon Silk Company, mentions the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not taxable. The Madras High Court, considering the details as to the specification of the articles to be supplied to Gwalior Rayon Silk Mfg. Co. Ltd., rejected the claim of sale of firewood. In [1983] 52 STC 3 (Mad.) (Malayalee Stores v. State of Tamil Nadu), wherein also the sale of eucalyptus tree for the manufacture of rayons to use wood as raw material describing the wood as firewood, was not accepted and it was taxed under entry 84 of the First Schedule as a single point goods. The High Court has observed that what meaning an article has in the market and in commerce between dealers and customers in general must be its proper classification in the statute. In [1992] 86 STC 569 (Mad.) (Gwalior Rayon Silk Manufacturing (WVG) Company Li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... logs of eucalyptus only as pulpwood for the art silk industry and therefore, eventhough originally the respondent-assessee purchased it as timber, on account of its use, later in the manufacture of silk industry, the commodity has to be treated as multi-point goods and the assessing authority has rightly levied multi-point tax at 4 per cent whereas the Appellate Tribunal has wrongly interpreted that the commodity still remains to be timber and not taxable as it was second sales. The apex Court itself in the decision cited by the learned Government Advocate, namely [1986] 63 STC 322 [Atul Glass Industries (P) Ltd. v. Collector of Central Excise] has laid down the ratio that the nature of the goods cannot be determined by the test of use to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Schedule. Similarly, in [1992] 86 STC 569 [Gwalior Rayon Silk Manufacturing (WVG) Company Limited v. State of Tamil Nadu] also, the commodity namely, eucalyptus, logs sold to Gwalior Rayon was brought under entry 84 of the First Schedule as single point goods though in those cases also, the commodity was sold as raw material for the rayon industry, and the pulpwood was not treated as multi-point goods but only as timber under entry 84 of the First Schedule. 3.. The learned counsel appearing for the respondent-Tr. N. Inbarajan, relying on a decision in [1973] 32 STC 309 (AP) (G. Ramaswamy v. State of Andhra Pradesh) contended that the timber, converted as planks, rafters, etc., was not a conversion of the character of the commodity and as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dras High Court in [1994] 93 STC 87 (State of Tamil Nadu v. C. Kanchanamala) has held that when the purchased timber was sliced, into splints and sold the splints to match industry, there was no essential difference in identity between the original commodity and the processed article for the purpose of section 7-A of the Tamil Nadu General Sales Tax Act. But, the learned Government Advocate contended that there must be consumption of the goods for the change of identity for the application of section 7-A and therefore, in that case, as the character of timber was not consumed in the process of splints, it was held therein that there was no difference in the identity of the commodity. It is true that for application of section 7-A as to the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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