State Taxation Tribunal - Tamil Nadu
State Of Tamil Nadu vs N. Krishnaswamy Naidu on 26 March, 1999
Equivalent citations: [2001]123STC553(TRIBUNAL)
JUDGMENT
J. Kanakaraj, J. (Chairman).
1. The assessee raises an interesting question in this tax revision case. The facts are very simple, The assessing officer rejected the account and made a best judgment in respect of the bakery products dealt with by the assessee in the following manner :
For the period from September 16, 1981 till February 28, 1982 the taxable turnover was fixed at Rs. 1,95,999. For the period from March 1, 1982 till March 31, 1982 the turnover relating to bakery products was fixed at Rs. 35,636. The best judgment was based on the inspection made on November 12, 1981 and the seizure of certain incriminating records. The split-up figures up to February 28, 1982 is because of the difference in the rate of tax. Before the appellate authority certain concessions were granted and the turnover was fixed in the following manner :
For the period from April 1, 1981 to September 15, 1981 the turnover was fixed at Rs. 1,60,286.91. For the period from September 16, 1981 to March 31, 1982 it was fixed at Rs. 1,26,648.47. Before the Appellate Tribunal the only argument for consideration was whether the said turnovers are eligible for exemption based on certain Government notifications. It is not disputed that notification dated March 26, 1981 makes certain exemption with effect from April 1, 1981. So far as we are concerned, the exemption was as follows :
"(v) an exemption in respect of the tax payable by any dealer under the said Act on the sales of appalam, vermicelli and bakery products without a brand name or with brand name not registered under the Trade and Merchandise Marks Act, 1958 (Central Act 43 of 1958)."
By a subsequent notification dated September 11, 1981 the following proviso was added to the earlier notification :
"Provided that in respect of bakery products, the total turnover of the dealer for a year does not exceed rupees two lakhs."
2. Considering the above notification the Appellate Tribunal says that the turnover for the period from April 1, 1981 till September 15, 1981 is totally exempt by virtue of the first notification. Therefore, the turnover for period September 16, 1981 till March 31, 1982 being only Rs. 1,29,372 is less than Rs. 2 lakhs as contemplated by the proviso which was added on September 11, 1981. Consequently, the Appellate Tribunal holds that the total turnover of bakery products for the year is exempt. The Revenue has filed the revision petition challenging the order of the Appellate Tribunal. It is argued by the Government that the second notification being an amendment to the first notification dated March 26, 1981 must be applicable to the case of the assessee at the end of the assessment year, namely, March 31, 1982. Inasmuch as the turnover for the year has to be taken into account, the total turnover right from April 1, 1981 till March 31, 1982 should be taken into consideration and so construed it is beyond the limit of Rs. 2 lakhs referred to in the notification. Therefore, it is argued that the Appellate Tribunal is not right in granting exemption. On the other hand, it is argued by Mr. Prasad, for the respondent that the exemption granted by the first notification should be made available to the assessee till the proviso was introduced. In other words, in respect of the sales of bakery products the first notification dated March 26, 1981 was available and the assessee cannot therefore be denied the said exemption granted by the notification. In other words, the sales till September 11, 1981 had already become entitled to the exemption or the exemption had already accrued to the assessee in respect of such sales. We are of the opinion that the argument of the respondent cannot be accepted. The Tamil Nadu General Sales Tax Act refers to. an assessment for the entire financial year and the basis of the assessment is "the year". Therefore, even though, there was a notification granting exemption in respect of bakery products, if during the currency of the year itself an amendment is brought forward limiting the grant of exemption, the amendment has to be given effect to. In this connection one must remember that these are all notification under Section 17 of the Tamil Nadu General Sales Tax Act granting certain concessions or exemptions to the assessees. Therefore, such concessions or exemptions should be strictly considered and where the notification is amended during the currency of the year the assessee cannot get a concession or exemption beyond what is stated in the amendment. Further, though an exemption notification is available on paper the turnover till September 16, 1981 cannot be wiped of from the records. The turnover is always there and it is only because of the exemption notification that the tax is not levied. Therefore, when at the end of the financial year an assessment is made for the entire year, the turnover for the entire year has to be taken into account. In fact the proviso refers to this "total turnover of the dealer for a year". Section 2(t) of the Tamil Nadu General Sales Tax Act says that the word "year" means the financial year. No doubt this definition is subject to the context being otherwise.
3. In this view of the matter we accept the stand taken by the revenue and allow this tax revision case restoring the orders of the assessing authority and A.A.C. and setting aside the orders of the Appellate Tribunal. The tax revision case is allowed in the above manner.
And this tribunal doth further order that this order on being produced be punctually observed and carried into execution by all concerned.
Issued under my hand and the seal of this Tribunal on the 26th day of March, 1999.