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TMI Blog2022 (6) TMI 99X X X X Extracts X X X X X X X X Extracts X X X X ..... opportunity of hearing to the appellant, within a period of four weeks thereafter. Appeal disposed off. - Writ Appeal No. 186 of 2022 And C.M.P. No. 1310 of 2022 - - - Dated:- 7-4-2022 - Honourable Mr. Justice R. Mahadevan And Honourable Mr.Justice J. Sathya Narayana Prasad For the Appellant : Mrs. Radhika Chandra Sekhar for Mr. K. Vaitheeswaran For the Respondents : Mr. Richardson Wilson Additional Government Pleader (Taxes) JUDGMENT R. MAHADEVAN, J. Challenging the order of dismissal dated 06.09.2021 passed by the learned Judge in W.P.No.33462 of 2005, the appellant / assessee has come up with this writ appeal. 2.The necessary facts leading to the filing of this writ appeal would run thus: 2.1. The appellant was engaged in the business of selling/marketing of pre-recorded audio cassettes and was registered under the provisions of the Tamil Nadu General Sales Tax Act, 1959 (in short, the TNGST Act ) and the Central Sales Tax Act,1956 (in short, the CST Act ). During the course of such business, the appellant used to purchase pre-recorded audio cassettes from the suppliers in Tamil Nadu, who were also registered under the TNGST Act and who c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the same, the appellant referred to the circular dated 12.04.2001 issued by the second respondent, wherein it was clarified that sale of pre-recorded cassettes purchased locally from registered dealers is second sales and is not liable to tax at the hands of the appellant, if there is proof to show that the earlier purchase had already suffered tax under the TNGST Act. 2.4. While the things stood thus, the second respondent issued a Circular dated 16.05.2003 clarifying that the dealers who undertake the work of recording audio, do not have a right to sell the recorded cassettes / CDs to persons other than the audio right holders and hence, such transaction of recording audio and supply of recorded cassettes is only works contract in nature. Further, in the said circular, all the assessing officers were instructed to verify the assessment files of such dealers/ assessees and assess the transaction under section 3B in the case of audio / video recording done on cassettes/ CDs treating them as works contract, and assess the sale of recorded cassettes / CDs by audio / video right holders as first sales, under section 3(2) of the TNGST Act, 1959. Aggrieved by the same, the appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... found that the petitioner is a copyright owner and has supplied the master copy to their customer, who in turn, recorded the audio in the blank cassettes of their own and returned to the petitioner and for this transaction, the customers have raised sale bills against the petitioner-company as if pre-recorded audio cassettes were sold and the petitioner, in turn, has sold the pre-recorded cassettes as second sale and claimed exemption as second sale of pre-recorded casssettes. The reason stated by the second respondent for bringing the relevant turnover to tax is that the person (customer) who has undertaken the recording work has no right to sell the recorded cassettes, because he has done the job of recording for labour on works contract basis, for which, the customers have also received labour charges and on that basis, the petitioner, who holds right over the audio cassettes, was treated as the first seller of the pre-recorded cassettes, liable to tax under Section 3(2) of the Act. With reference to reliance placed on the orders of the first appellate authority for the year 1998-99, the second respondent has stated in the impugned order that the decision taken by the Appellate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded audio cassettes and CDs. At the relevant period, the Appellant purchased pre-recorded audio cassettes and CDs from M/s.Optical Disc, M/s.Star Music and others. During the said period there were no specific agreements governing the relationship and there were no restrictions on the seller to sell only to the Appellant. 4. I state that one of the sellers M/s. Star Music apart from selling cassettes and CDs to the Appellant have also sold cassettes and CDs to various buyers such as Meta Audio, Mass Movie Makers, Best Media Associates (India) Pvt Limited, Manoj Creations, Music King, Misc World-Great Wholesale Club Ltd, United India Exporters, Essen Musical and Raj Video Vision. 5. I state that the major manufacturers in the trade used to be M/s. Optical Disc Marketing (India) Pvt Ltd. The said company has become defunct or not in business, as the music industry itself is no longer in cassettes and CDs and has moved to downloads, digital content and streaming. 6. I state that the appellant, a partnership firm is no longer in the business of selling cassettes/CDs. Due to invent of technology cassettes were replaced by CDs, thereafter pen drive and now only through dig ..... X X X X Extracts X X X X X X X X Extracts X X X X
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