The State of Tamil Nadurepresented by DeputyCommissioner of Commercial Taxes,Tiruchirapalli Division,Tiruchirapalli v. A, Dindigul Road,Tiruchirapalli

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED: 01.07.2010CORAM:THE HONOURABLE Mr. JUSTICE F.M.IBRAHIM KALIFULLAandTHE HONOURABLE Mr. JUSTICE M.M.SUNDRESHTAX CASE (REVISION) No.2265 of 2008 The State of Tamil Nadurepresented by DeputyCommissioner of Commercial Taxes, Tiruchirapalli Division, Tiruchirapalli...Petitioner/versus/Tvl. Meenakshi Asphalts9A, Dindigul Road, Tiruchirapalli...Respondent. Tax Case Revision Petition filed under Section 38(1) of the Tamil Nadu General Sales Tax Act, 1959 to revise the order of the Tamil Nadu Sales Tax Appellate Tribunal (Additional Bench), Madurai, in M.T.A.No.160/94 dated 28.7.1998 against the order of the AppellateAssistant Commissioner(CT)Tiruchirapalli, dated.28.12.1993 and made in Appeal No.612/93 against Asst. No.360865/87-88 dated.16.9.93 on thefile of the Commercial Tax Officer, Palakarai-I, Trichy. For petitioner: Mr.Haja Naziruddin, Special Government Pleader. For respondent: Mr.R.Senniappan. (ORDER OF THE COURT WAS MADE BY F.M.IBRAHIM KALIFULLA,J.)The Revenue has come forward with this revision raising thefollowing questions of law:-(1)Whether in the facts and circumstances, the Tribunal is legally correct in setting asidethe order of remand ordered by the firstappellate authority in respect of a turnover ofRs.4,33,657/- for verification of the place ofbusiness and registration of the selling dealer https://hcservices.ecourts.gov.in/hcservices/ shown in the disputed bills?(2) Whether the consequential deletion ofsurcharge, penalty by the Tribunal is alsolegally sustainable?"

The Appellate Assistant Commissioner remitted the matterback for ascertaining the liability. The Tribunal applying the lawlaid down by this Court, set aside the order of the AppellateAssistant Commissioner as well as the Assessing Authority.

The question for consideration is whether therespondent/ assessee is entitled for tax exemption on the ground thatits sale was a second sale. The only contention raised on behalf ofthe Revenue was that the first sale was not by a registered dealerand therefore, the respondent's claim for exemption on the ground ofsecond sale, cannot be permitted. Such a contention was raised onbehalf of the petitioner on the footing that the registration of thelocal dealer from whom purchase was made by the respondent/ assessee, was cancelled with retrospective effect and therefore, on the date ofpurchase by the respondent/ assessee, the seller did not have a validregistration. The question raised was directly covered by a decisionof this Court in STATE OF TAMIL NADU v. C.K.GAJAPATHY AND CO. [57(1984)S.T.C.,137] and the Division Bench has held as under:-" .... If the assessee is able to show thatthere has been merely a taxable sale and its salewas only a second sale, it is entitled to claimexemption of its sales as second sales. ..... Itis not the case of the Revenue that all saleseffected by unregistered dealers are not liableto be taxed under the Act. As a matter of fact, if that were to be the position, all registereddealers would like to have their registrationcancelled for the purpose of escaping from tax. Therefore, we are not in a position to accept thecontention of the learned Government Pleader thatmerely because Messrs. Premier Steel Distributorswere not registered dealers at the time when theysold the goods to the assessee, their sales arenot taxable sales. .... Once Messrs. PremierSteel Distributors are found to be dealersengaged in the manufacture or purchase or in thebusiness of purchase and sale of stainless steelvessels, all sales effected by them are taxablesales. It has been held by this Court inGOVINDAN & Co. v. STATE OF TAMIL NADU [1975 (35)STC., 50] and STATE OF TAMIL NADU V.CHAMUNDESWARI ENTERRISES [(1983) 52 STC., 124]that if there is a prior sale in the State, the https://hcservices.ecourts.gov.in/hcservices/ subsequent sales cannot be taken to be exigiblefor tax under the Act as second sales. "

Having regard to such a categoric pronouncement by this Court, and the questions of law raised in this revision petitionwhich are directly covered by the above said decision, we do not findany scope to interfere with the order of the Tribunal and thequestions of law are answered against the Revenue. The Tax Case(Revision), therefore, fails and is dismissed. No costs. Sd/-Asst. Registrar/True Copy/Sub. Asst. RegistrarsaiTo.1. The Tamil Nadu Sales Tax Appellate Tribunal, Additional Bench, Madurai.2. The Deputy Commissioner of Commercial Tax, Tiruchirapalli Division, Tiruchirapalli.3. The Appellate Assistant Commissioner(CT)Tiruchirapalli.4. The Commercial Tax Officer-I, Palakarai-I, Tiruchi.+ 1 CC to Mr.R.Senniappan, Advocate, SR.47772T.C.(R) 2265 OF 2008MBS(CO)EM/15.7.10