Heard Mr. S. Raveekumar, the learned counsel appearing for the petitioner and Mr.K. Venkatesh, the learned Government Advocate for the respondent.
2. The petitioner, who is a registered dealer on the file of the respondent, under the provisions of the Tamil Nadu General Sales Tax Act, 1959, has filed this Writ Petition, challenging the order of assessment, dated 28.06.2005, for the year 2001-02. Though there are several issues in the impugned order of assessment, the challenge in this Writ Petition is confined only to the deemed first sale of dyes, chemicals and furnace oil.
3. So far as the deemed first sale of dyes and chemicals are concerned, the learned counsel appearing for the petitioner fairly concedes that the issue has been decided against the petitioner in the light of the decision of the Hon'ble Division Bench of this Court, in the case of (State of Tamil Nadu rep. by Deputy Commissioner of Commercial Taxes, Tiruchirappali Division Vs. Tvl. Geetha Dyeing and others) made in T.C.(R) Nos.842, 817, etc., of 2006 (batch), dated 01.07.2011. The Hon'ble Division Bench allowed the Tax Case Revisions, by following the earlier order, in T.C.No.1661 of 2008 in the case of (Tvl. Ganapathy Colouring Co. Cuddalore Vs. The State of Tamil Nadu, rep. by its Deputy Commercial Tax Officer, Cuddalore) in Tax Case Revision No.1661 of 2008, dated 25.08.2010. For better reference, the order passed in T.C.(R) Nos.817, 842 etc., of 2006, dated 01.07.2011 is reproduced hereunder:-
"Learned counsel for the Revenue fairly pointed out that the decision of this Court rendered in T.C.No.1661 of 2008, dated 25.08.2010, would squarely applicable to the cases on hand, wherein, the use of dyeing materials in the course of works contract was considered by this Court.
2. In the said revision, while considering the decisions reported in (Rainbow Colour Lab and another Vs. State of Madhya Pradesh and other) [2001] 118 STC 9 and Associated Cement Companies Limited V. Commissioner of Customs [2001] 124 STC 59, this Court held that after introduction of Section 3-B and after amendment made to the definition of 'Sale' under Section 2 (n) (ii), the contention raised by the learned counsel for the assessee cannot be accepted, since by the operation of law, the transfer of goods involved in works contract would amount to 'sale' taxable under Section 3-B. Thus, the dyes and chemicals used in the execution of works contract would attract levy of tax. The assessee had purchased the dyes and chemicals from outside state. Consequently, this Court held that entire turnover was cancelled. However, as regards levy of penalty, this Court set aside the levy since there was no suppression of sale in the turnover.
3. Following the said decision, the above tax case revisions are allowed, thereby, restoring the order of the Assessing Officer."
4. Thus, in the light of the above referred settled legal position, the turnover as assessed in respect of the deemed first sale of dyes and chemicals is confirmed.
5. Insofar as the challenge made on the deemed first sale of furnace oil is concerned, the learned counsel for the petitioner contended that, the furnace oil is nothing but a material used in the process of dyeing, which amounts to manufacture, and it is purchased against Form XVII Declaration and since it is used in the process of dyeing, the petitioner is entitled to purchase the said consumable upon furnishing of Form XVII Declaration, and therefore, the observation of the Assessing Officer is incorrect. To support such stand, the learned counsel relied upon the decisions reported in (2010) 36 VST 67 Madras in the case of (Tubde Investments of India Ltd., Vs. State of Tamil Nadu) and (2008) 5 VST 228 (Orissa) in the case of (Reliance Industries Vs. Assistant Commissioner of Sales Tax and others).
6. In the light of the contention raised by the petitioner with regard to the deemed first sale of furnace oil, this Court is inclined to remand the matter back to the respondent for fresh consideration only with regard to the turnover, which has been assessed on the deemed first sale of furnace oil, giving liberty to the petitioner to canvass all the grounds, which have been urged before this Court.
7. Accordingly, the Writ Petition is partly allowed and the findings recorded by the Assessing Officer with regard to the deemed first sale of furnace oil is set aside and the matter is remanded to the respondent for fresh consideration. In respect of other part of the assessment, the same are confirmed, (as stated above) and the Writ Petition is dismissed to that extent. The petitioner is entitled to submit their fresh objections with regard to the deemed first sale of furnace oil, raising all contentions as canvassed herein before this Court within a period of 15 days from the date of receipt of a copy of this order, after which, the respondent shall afford an opportunity of personal hearing to the petitioner and redo the assessment under the said head alone in accordance with law. No costs. Consequently, connected Miscellaneous Petition is closed.
26.07.2017 Index : Yes/No Internet:Yes/No sd To The Deputy Commercial Tax Officer, Mettupalayam Road Circle, Coimbatore District.
T.S.Sivagnanam , J., sd W.P.No.34122 of 2005 & W.M.P.No.37005 of 2005 26.07.2017