Heard Mr.Gautham S.Raman, learned counsel for the petitioner and Mr.S.Kanmani Annamalai, learned Additional Government Pleader for the respondents. With consent of the learned counsel for both sides, the writ petition itself is taken up for final disposal.
2.The petitioner has filed this writ petition seeking for issuance of writ of Mandamus forbearing the respondents, their men, agents and officers from levying, demanding, collecting entry tax in respect of MS scraps sponge iron procured by the petitioner from within the state of Tamil Nadu on payment of appropriate duty and sent for job work outside the local area for conversion into billets and returned to the local areas for being made into finished products and thereafter sold within the local area again on payment of necessary tax.
3.The petitioner's case is that they are manufacturers of MS Channels, Angles, Squares, Rods and other iron and steel products, with their factory situated at Kakklur, Thirvellore District. Amongst various other inputs, two main raw materials required by the petitioner company are M.S.Scarp and Sponge Iron, which the petitioner company either imports into India or purchases from vendors in Tamil Nadu. Thereafter, the M.S. Scrap and Sponge iron are melted in an Induction furnace and converted into semi-finished form, called Billets. Then, these billets are rolled in the rolling unit and formed into angles, rods etc. The end finished good is then marketed by the petitioner company, who is assessed for TNGST under registration No.1722059/05-06. The petitioner Company is a registered Dealer on the file of the second respondent under the Tamil Nadu General Sales Tax Act and Central Sales Tax Act.
4.The petitioner's case is that for the purpose of converting the raw material into Billets, they require induction furnace, which facility they did not have, and hence, the petitioner outsources this fraction of the work, either within or outside the State of Tamil Nadu, for the purpose of conversion of the raw materials into Iron billets and the said billets are brought into the factory in Tamil Nadu and they are rolled in the rolling unit and formed into angles, rods etc. Therefore, it is submitted that the provisions of the Tamil Nadu Tax on the Entry of goods into local area Act 2001 would not apply to the case on hand. Therefore, they sought for issuance of Writ of Mandamus as mentioned above.
5.In my view, the petitioner should be able to establish before the Assessing Officer that the raw material sent outside the State is for a particular job work and the Billets are not purchased by the petitioner from the outside the State and brought into Tamil nadu for further process. Therefore, a blanket writ of Mandamus cannot be issued at this juncture. The petitioner should be left to adjudicate the issue as and when the issue is taken by the Assessing Officer.
6.With the above observations, the writ petition is disposed of by directing the Assessing Officer by affording an opportunity of personal hearing to establish that the provisions of the Tamil Nadu Entry Tax Act, 2001 would have no application to the type of the transaction done by them, as and when the assessment proceedings are initiated. Without following such procedure, the respondent shall not demand the tax.
7.With the above observation, the writ petition is disposed of. No costs. Consequently, connected miscellaneous petition is closed.
10.11.2017 Index: Yes/No Internet:Yes/No Speaking/Non-speaking order maya To
1.The State of Tamil Nadu Rep by Secretary to the Government Commercial Taxes & Religious Endowment Dpt.
Chennai 600 009.
2.Deputy Commercial Tax Officer Tiruvellore.
T.S.SIVAGNANAM, J.
maya W.P. No.12389 of 2006 Dated : 10.11.2017