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TMI Blog2008 (12) TMI 706X X X X Extracts X X X X X X X X Extracts X X X X ..... in the process and the chemicals were completely washed away in the process and as such acted merely as a "catalyst". The particulars so furnished by the assessee has to be considered by the assessing officer and a factual finding should be recorded with due opportunity to the petitioner. Since the matter pertains to the assessment year 1995-96, the assessing authority is directed to decide the issue as expeditiously as possible and in any case, within a period of three months from the date of receipt of a copy of this order. - T.C. (R) No. 1299 of 2006 - - - Dated:- 1-12-2008 - PRABHA SRIDEVAN AND SASIDHARAN K.K. , JJ. ORDER:- The order of the court was made by K.K. SASIDHARAN J. This tax case is at the instance of the assessee, being aggrieved by the order passed by the Tamil Nadu Sales Tax Appellate Tribunal dated May 26, 2000 in T. A. No. 1009 of 1999. The following substantial question of law is raised for our consideration: Whether the Sales Tax Appellate Tribunal was correct in their conclusion that the chemicals used in the process of tanning raw hides and skins involves transfer of property and liable for tax under section 3B of the Tamil Nadu Gener ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... overnment Pleader appearing on behalf of the Revenue, however, contended that the chemicals have really improved the product and consequently enhanced the value of leather and as such, there was accretion of property in the finished goods and in such view of the matter, the authorities were fully justified in rejecting the claim of exemption. The learned counsel for the assessee relied on the following judgments: (1) Pest Control India Ltd. v. Union of India [1989] 75 STC 188 (Patna). (2) Commissioner of Sales Tax v. R.M.D.C. Press Pvt. Ltd. [1999] 112 STC 307 (Bom). (3) Bavens v. Union of India [1995] 97 STC 161 (Ker). (4) Tamil Nadu Mosaic Manufacturers Association v. State of Tamil Nadu [1995] 97 STC 503 (Mad). The issue involved in Pest Control India Ltd. v. Union of India [1989] 75 STC 188 (Patna) pertains to exemption claimed on the value of the chemicals used in execution of contract for eradication of pests, rodents, termites, etc. The Division Bench of the Patna High Court having found that the involvement of chemicals in the contract of eradication of pests does not involve transfer of any goods held thus (at page 193 of STC): 13. While it is true th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It cannot be said that when a customer gets some papers printed, he also gets ink either as ink or in any other form. There is thus no transfer of ink involved in execution of a works contract of printing. It may be pertinent to observe that what is taxable under the Act is the value of the goods which get transferred to the customer in execution of the works contract, either as goods or in any other form and not the value of goods used or consumed in the execution of the works contract, if such user or consumption does not result in transfer of property in those goods in any form to the customer. That being so, in our opinion, the Tribunal was right in holding that there is no transfer of property in ink involved in the execution of contract of printing, either as ink or in any other form. A Division Bench of the Kerala High Court in Bavens v. Union of India [1995] 97 STC 161 observed that when a photographer takes a photograph of his customer, develops the negative and supplies positive prints in the desired size to the customer, the photographer uses his own camera and his own film and the negative which was subjected to further processing belongs to the photographer and no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er can be made exigible to sales tax. A Division Bench of this court in Tamil Nadu Mosaic Manufacturers Association v. State of Tamil Nadu [1995] 97 STC 503 held that whenever a commercial commodity which has suffered sales tax was transformed into another distinct commercial commodity, it becomes a separate and distinct commercial commodity for the purposes of levy of sales tax and it can be taxed again. It was further held that when the dealer purchases a commercial commodity which has suffered sales tax and out of such commercial commodity he manufactures another distinct commercial commodity and uses it in the execution of a works contract, the commercial commodity purchased by the dealer was not used in the execution of the works contract in the same form in which it was purchased; what is used in the execution of the works contract is a distinct and different commodity. It was also held that the cost of consumables used in the execution of works contract, the property in which is not transferred in the course of execution of the works contract, will come within the purview of labour charges and other like charges contemplated under sub-section (2)(e) of section 3B of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xemption on the value of chemicals, no factual details were furnished before the assessing authority or before the Appellate Assistant Commissioner as well as before the Tribunal about the steps involved in tanning by usage of chemicals. Even though the learned counsel has produced before us the process chart, the fact remains that those particulars were not produced before the authorities below. The appellate authority simply stated that transfer of property can take place in any form but however did not give any factual finding as to how the transfer of property took place in the present case. Therefore we are of the considered opinion that the matter requires to be considered by the assessing authority afresh. Accordingly we set aside the order dated May 25, 2000 of the Sales Tax Appellate Tribunal and the matter is remitted to the assessing authority for fresh consideration. The petitioner is directed to produce materials before the assessing authority in support of their contention that there was no transfer of property involved in the process and the chemicals were completely washed away in the process and as such acted merely as a catalyst . The particulars so furnish ..... X X X X Extracts X X X X X X X X Extracts X X X X
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