(Order of the Court was made by B.RAJENDRAN, J.) The assessee is the appellant herein. The assessee is manufacturer and seller of paper cones, reported a total and taxable turnover of Rs.9,05,085/- and Rs.6,79,270.85/- respectively in the "A1" returns filed for the year 1991-92. The Assessing Officer by relying upon G.O.P.No.1316/CT & RE dated 07.10.1988, stated that the sale by any dealer of textile machinery spares in which Bobbin, Cones and Tubes were used, were given concessional rate of tax from 8% to 4% was not applicable as the assessee has stated that it is a mere packaging material.
2. Aggrieved against the same, the petitioner preferred the appeal before the Appellate Assistant Commissioner and the Appellate Assistant Commissioner in his order found that the sale made by the assessee would clearly come under the provisions of G.O.P.No.1316/CT & RE dated 07.10.1988 and granted the exemption by allowing the appeal of the assessee.
3. The Joint Commissioner on suo motto action negatived the contention of the Appellant Assistant Commissioner in invoking the G.O.P.No.1316/CT & RE, dated 07.10.1988 and gave a finding that though the sale was made to the spinning mill or usage of the cones, the Joint Commissioner only found that the material which is supplied is not a metallic cone and it is only a paper cone and it was used only as a packaging material and not as mentioned for the purpose of spinning mill and negatived the contention of the exemption granted in G.O.P.No.1316/CT & RE, dated 07.10.1988.
4. Setting aside the order of the Appellate Assistant Commissioner and treating it as paper cones sold by a dealer falling under the general goods, levied the tax. Aggrieved against the said suo motto revision made by the Joint Commissioner, the assessee preferred the appeal.
5. The appellant pleaded mainly on the two questions of law viz., "(a) Was the Joint Commissioner of Commercial Taxes justified in not considering the fact that G.O.P.No.1316/88 dated 7.10.88 applied to the appellant ?
(b) Did not the Joint Commissioner make a mistake in failing to consider that the term "cones" was wide enough to include all types of cones used in spinning mills irrespective of the materials with which they were made?"
6. The appellant has specifically pleaded that G.O.P.No.1316/CT & RE, dated 07.10.1988, has brought in the cones in the list of 12 items for which reduction has been ordered. The learned counsel brought to our notice the very G.O. which reads as follows:
"634. Sale by any dealer of textile machinery spares listed below:-
Textile spares:-
Reduced from 8% to 4% with effect from 7th October, 1988: No.II(1)/CTRE/144(1)/88-G.O.P.No.1316, dated 7th October, 1988 (Gazette Entry, dated 7th March, 1993 and become taxable under item D-35 of First Schedule from 12th March, 1993 but the rate of tax was reduced from that date of 4% by notification"
7. According to the appellant, the item of cones sold by the appellant to the spinning mills is only utilised for the purpose of manufacture and it is for the textile machinery and it is squarely covered as item No.9 under the caption "9.Bobbin, Cones and Tubes". The said G.O. in which exemption is granted was very much prevalent and available for that assessment year which is extracted from the G.O.
8. The appellant also pointed out that the assumption of the Joint Commissioner that paper cones will not come under the provision of the G.O. and it is only for wrapping is without any basis.
9. On a careful reading of the said G.O., a specific recital has been made for granting this exemption, whereby it is clearly stated that sale by any dealer of Textile machinery spares listed below are given the exemption. The Government has clearly granted this exemption to those dealers who are dealing in textile machinery and spares. They also clearly included various items specifying those items to be either spares/accessories for machinery for the purpose of textile industry. In this particular case under Clause No.9 the words used is only Bobbin, Cones and Tubes and it is clearly admitted by the Assessing Officer as well as the Revisionary Authority that the cones alone was supplied and it is not denied. The assessee is able to establish that what was manufactured and supplied is inconsonance with the said G.O. viz. Cones and there cannot be any interpretation made by the Joint Commissioner on suo motto application stating that the cones are only paper cones and such paper cones could not be used for manufacturing purpose or in the alternative that cones could have been only used for packaging materials are unwarranted and unjustified.
10. Even otherwise, in the suo motto revision, the authority has not placed any record or placed reliance or inspection or any other mode known to law to give a drastic conclusion without reading the provisions as envisaged in the G.O. The G.O. can only be interpreted in the strict sense since any sale of cones made especially to a spinning mill which is a textile industry has to be deemed to be an accessory or spare part. The incorrect way in which the Revisionary Authority went to interpret the provision is not permitted in law.
11. Hence the petitioner has made out a successful case for interfering with the suo motto revision made by the authority below and the question of law that the Revisionary Authority had made a mistake in failing to consider that the term "Cones" was wide enough to include all types of cones used in spinning mills irrespective of the materials with which it is made is answered in favour of the assessee. As rightly pointed out in the G.O. it is not the difference between the metal or paper cone, what is stated is only cones. So long as the cones has been supplied, the assessee has made out a very good case for invoking the provision of the said G.O. and as rightly pointed out and held by the Appellant Assistant Commissioner, the reduced rate of tax is correctly applied to the assessee concerned and hence both the questions of law is answered in favour of the assessee and the order of the Joint Commissioner is set aside and the order of the Appellate Assistant Commissioner in reducing the tax rate at 4% at single point stands restored. The revision is allowed.
kk To The Joint Commissioner of Commercial Taxes III, Chennai