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2001 (10) TMI 1123

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..... assessment officer did not accept the turnover reported by the petitioner and had assessed the petitioner to a net turnover of Rs. 14,91,292.30 which was subjected to tax at 6 per cent being the rate of tax as per entry 101 of the First Schedule to the APGST Act plus additional levies and the tax aggregating to a sum of Rs. 95,621.91. The petitioner being aggrieved by the order of assessment made by the Commercial Tax Officer subjecting the turnover of the petitioner's goods to tax at 6 per cent treating the same as falling under entry 101 of the First Schedule to the APGST. Act preferred an appeal to the Assistant Commissioner (Appeals), (C.T.). Before the Assistant Commissioner (Appeals), (C.T.), the petitioner had contended that the goods sold by it being raw rubber and not an end-product of rubber, the same should be taxed at the general rate, i.e., 4 per cent. The Assistant Commissioner (Appeals), (C.T.), by his order dated March 20, 1980 set aside the order of the assessing officer. The Deputy Commissioner (C.T.) being of the opinion that the order of the Assistant Commissioner (Appeals), (C.T.) is improper, illegal and incorrect, had issued a show cause notice proposing to r .....

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..... ntry 101 of the First Schedule to the APGST Act. The learned counsel would maintain that in order to be a "rubber product" mentioned in entry 101 of the First Schedule to the APGST Act, such a product is expected to undergo some manufacturing process or such goods should emerge out of some activity which could be termed as "production" in ordinary parlance. The learned counsel would maintain that "raw RMA sheets" are not the outcome of any manufacturing process or the outcome of any activity which could be termed as "production" as that term is understood in ordinary parlance. The learned counsel, in support of his contention, would draw our attention to certain provisions of the booklet "Rubber Growers' Companion" published by the Rubber Board, in 1974. This booklet deals with processing of the crop from rubber plantations for marketing. The learned counsel would also rely on the decision of the Supreme Court in Karnataka Forest Development Corporation Ltd. v. Cantreads Pvt. Ltd. [1994] 95 STC 561 and the decision of the Madras High Court in Okay Rubber Corporation v. State of Tamil Nadu [1984] 55 STC 247. 6.. On the other hand, learned Special Government Pleader for Taxes, wh .....

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..... r globules suspended in an aqueous serum.....Fresh latex as it comes out from the tree is slightly alkaline or neutral but since it is an excellent medium for the growth of bacteria like milk, it becomes acidic rapidly due to bacterial action and gets coagulated or clotted on keeping. Therefore, fresh latex cannot be kept for long without pre-coagulation." "Wet, bleached and virgin rubber and rubber that is not completely dry at the time of buyers' inspection is not acceptable for any of the RMA official types (except slightly undercured rubber as specified under 5 ribbed smoked sheet description. Skin latex coagula shall not be used in whole or in part for producing any of the RMA types. Copper or manganese content in any RMA, type and grade of rubber shall not exceed the following maximum tolerances: Copper 8 parts and manganese 10 parts per million." "Nothing but ribbed smoked sheets of rubber can be used in making these grades; cuttings, block or frothy sheets, or other scrap, air-dried sheets or smooth sheets not permissible." 8.. In addition the booklet also deals with the methods of anticoagulation and preservation, type descriptions and packing specifications for natu .....

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..... ber Corporation case [1984] 55 STC 247, clearly supports the view taken by us. In that case also the question that arose for consideration was whether RMA rubber can be treated as raw rubber, viz., latex as defined in item No. 74 of the First Schedule to the Tamil Nadu General Sales Tax Act, 1959 exigible to 5 per cent sales tax? Dealing with this question, the Madras High Court has opined that RMA rubber sheets packed in bales and hessian wrapper is a processed rubber goods and is commercially a different commodity from raw rubber, i.e., latex. 10.. However, Sri S. Ravi, learned counsel for the petitioner, drawing our attention to the following provisions of the booklet at pages 44, 47 and 49- Page 44: "The crop from the rubber tree is latex, a milky liquid, which, as mentioned elsewhere, is harvested by the process of tapping." Page 47: "There is good market for preserved latex concentrate as it is an important raw material that finds its way into a wide spectrum of uses......" Page 49: "Latex when coagulated in suitable containers into thin slabs of coagulum and sheeted through a set of rollers consisting of a grooved set and dried, givers marketable forms of ribbe .....

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