Madras High Court
The State Of Tamil Nadu vs Tvl.Fisher Sanmar Limited on 6 December, 2019
Author: V.K
Bench: Vineet Kothari, R.Suresh Kumar
Judgt. dt. 6.12.19 in T.C.56 & 57/2019
State of TN v. Fisher Sanmar Ltd.
1/10
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 6.12.2019
CORAM
THE HON'BLE DR.JUSTICE VINEET KOTHARI
AND
THE HON'BLE MR.JUSTICE R.SURESH KUMAR
Tax Case Nos.56 & 57 of 2019
T.C.No.56/2019
The State of Tamil Nadu,
rep. by the Joint Commissioner(CT)
Chennai (South) Division,
Chennai 600 006. Appellant
Vs.
Tvl.Fisher Sanmar Limited,
No.147, Karpagam Road,
Chennai 600 086. Respondent
T.C.No.57/2019
The State of Tamil Nadu,
rep. by Joint Commissioner(CT)
Coimbatore Division,
Coimbatore. Appellant
Tvl.Saravana Engineering Traders,
No.12/15-A, Krishnasamy
Mudaliar Road,
R.S.Puram, Coimbatore 641 002. Respondent
Tax Case No.56/2019 filed under Section 38 of the TNGST Act,
1959 against the order of the Tamil Nadu Sales Tax Appellate Tribunal
(Main Bench), Chennai dated 28.1.2013 made in T.A.No.6 of 2011.
http://www.judis.nic.in
Judgt. dt. 6.12.19 in T.C.56 & 57/2019
State of TN v. Fisher Sanmar Ltd.
2/10
Tax Case No.57/2019 filed under Section 38 of the TNGST Act,
1959 against the order of the Tamil Nadu Sales Tax Appellate Tribunal
(Additional Bench), Coimbatore dated 24.1.2014 made in
C.T.A.No.192 of 2004.
For Appellant : Mr.Mohammed Shaffiq
Special Government Pleader
COMMON JUDGMENT
(Delivered by DR.VINEET KOTHARI,J) The State has filed these Tax Revision Cases aggrieved by the order passed by the learned Sales Tax Appellate Tribunal (Main Bench), Chennai dated 28.1.2013 made in T.A.No.6 of 2011 and that of the learned Sales Tax Appellate Tribunal (Additional Bench), Coimbatore dated 24.1.2014 made in C.T.A.No.192 of 2004, by which the learned Tribunals allowed the Appeals filed by the respective Assessee M/s.Fisher Sanmar Limited, Chennai and M/s.Saravana Engineering Traders, Coimbatore and held that that Additional Tax levied under Section 3(4) of the TNGST Act was not attracted for the goods manufactured by the Assessee and sold in the course of export, following the decision of this court in the case of Tube Investments of India Ltd. v. State of Tamil Nadu ((2010) 36 VST 67).
2. The learned counsel appearing for the Petitioner/Revenue fairly submits that the controversy involved in the case on hand is squarely covered by the decision of this Court in Tube Investments http://www.judis.nic.in Judgt. dt. 6.12.19 in T.C.56 & 57/2019 State of TN v. Fisher Sanmar Ltd.
3/10of India Limited case, which was rightly followed by the learned Tribunal.
3. The relevant portion of the order passed by the Tribunal is quoted below for ready reference:-
"10) The learned Counsel for the Appellant would simply and at the same time strenuously submit that export sale is also a sale as mentioned in Section 3(4) of the TNGST Act 1959 and hence export sale cannot be disallowed for the purpose of availing concessional rate of tax in respect of the corresponding purchase of raw materials. The learned State Representative would submit that a correct interpretation of Section 3(4) of the TNGST Act 1959 would make it abundantly clear that local sale of the manufactured goods alone will qualify for purchase of raw materials at the concessional rate of tax under section 3(3) of the TNGST Act, 1959. In support of this contention, the learned State Representative would rely upon the case law reported in (2004) 136 STC 215 in "ELGI"
Equipments vs. Assistant Commissioner of http://www.judis.nic.in Judgt. dt. 6.12.19 in T.C.56 & 57/2019 State of TN v. Fisher Sanmar Ltd.
4/10Commercial Taxes and (1997) 107 STC 571 in State of Karnataka vs. B.M.Ashraf and Co."
11) To repel this contention, the learned Counsel for the Appellant/Assessee would submit that recently a Division Bench of the Hon'ble High Court of Madras in the case law reported in (2010) 36 VST 67 in Tube Investments of India Ltd. vs. State of Tamil Nadu has held that export sale is also a "sale" as contemplated in the first part of Section 3(4) of the Act and hence not exigible to Tax under Section 3(4) of the TNGST Act 1959.
12) We of the considered view that the case relied upon by the State Representative viz., (1997) 107 STC 571 arose out of the interpretation of Section 6 of Karnataka Sales Tax Act, 1957 in the matter of levy of purchase tax. But in our case, we are concerned about the tax liability under Section 3(4) of the TNGST Act 1959 which has been specifically considered and answered by the Hon'ble High Court of Madras in the above stated case. In this case the Hon'ble High Court of Madras has held http://www.judis.nic.in Judgt. dt. 6.12.19 in T.C.56 & 57/2019 State of TN v. Fisher Sanmar Ltd.
5/10that the ratio held in 107 STC 571 could not be applied to the question involving levy of Tax under Section 3(4) of the TNGST Act 1959. We by respectfully following the observation made by the Hon'ble High Court of Madras stated supra hold that the case law in 107 STC 571 could not be applied to the question involved in our case. Further, the other case law relied upon by the learned State Representative (2004) 136 STC 215 "ELGI" Equipments cannot also advance the case of the Revenue in as much as it was rendered by the Honourable Tamil Nadu Taxation Special Tribunal and on the other hand, the case law relied on by the Counsel for the appellant is one rendered by the Hon'ble High Court of Madras and we are bound by the decision of the Division Bench of Honourable High Court of Madras only.
13. Hence, we have no hesitation to hold by respectfully following the ratio held by the Division Bench of Honourable High Court of Madras in the case law cited above that export is also a sale as http://www.judis.nic.in Judgt. dt. 6.12.19 in T.C.56 & 57/2019 State of TN v. Fisher Sanmar Ltd.
6/10contemplated in the first part of Section 3(4) of the TNGST Act, 1959 and consequently hold that purchase turnovers of raw materials by issue of Form XVII declaration availing concessional rate of tax under Section 3(3) of the TNGST Act, 1959 corresponding to the export of manufactured goods could not be assessed to tax under Section 3(4) of the TNGST Act 1959 and we answer this point in favour of the Appellant."
4. The relevant portion of the decision in Tube Investments of India Limited case ((2010) 36 VST 67) is also quoted below for ready reference:-
"The petitioners purchased chemicals, consumables and packing materials at concessional rate of three per cent tax as provided under section 3(3) of the Tamil Nadu General Sales Tax Act, 1959 by using form XVII declaration and exported part of the manufactured goods through seaport as well as airport. The petitioners took the stand that since the export sale took place in the state of Tamil Nadu, there could be no liability under Section 3(4) http://www.judis.nic.in Judgt. dt. 6.12.19 in T.C.56 & 57/2019 State of TN v. Fisher Sanmar Ltd.7/10
of the Act but it was not accepted by the assessing authority and assessment order was passed. The Appellate Assistant Commissioner as well as the Tribunal confirmed the assessment of Tax under Section 3(4) of the Act. On revision and writ petitions:
Held, allowing the petitions, that when the State lacked the legislative competence by virtue of the Constitutional embargo to levy any tax on export sale, the indirect creation of any tax liability on such "export sales" on the inputs purchased could not at all be countenanced. Further the export sale was fully covered by the definition of "sale" under section 2(n) read along with Explanation 3(a). It could never be disputed that the goods manufactured by availing of the concessional rate of tax in respect of those materials purchased in the manufacture of goods as provided under section 3(3) by itself would make it an ambiguous that such goods were within the State. When the stipulations http://www.judis.nic.in Judgt. dt. 6.12.19 in T.C.56 & 57/2019 State of TN v. Fisher Sanmar Ltd.8/10
to be satisfied as prescribed under Explanation 3 to section 2(n) were fulfilled, certainly the export sale was also deemed to be a "sale" as defined under section 2(n) of the Act for the purpose of the Act. The expression "any other manner" in section 3(4) having been used following the expression "for sale"
and applies the maximum edusdem generis, it could only mean that any despatch to a place outside the State either by way of breach transfer or by transfer to an agent by whatever manner called, either for sale or for any other purpose, and it could not be attributed to an export sale. Therefore the export sale was nothing but a sale for which and exigency of liability would not occur as provided under section 3(4) of the Act."
4. The above decision in Tube Investments of India Limited case ((2010) 36 VST 67) has been followed by another Division Bench in the case of State of Tamil Nadu v. Essar Inc. and another ((2015) 79 VST 588). The decision taken by the Tribunal following the decision of this court in Tube Investments of India http://www.judis.nic.in Judgt. dt. 6.12.19 in T.C.56 & 57/2019 State of TN v. Fisher Sanmar Ltd.
9/10Limited case, is unexceptionable. There is no merit in the present Revision Cases filed by the State and they are liable to be dismissed. Accordingly, they are dismissed. No costs.
(V.K.,J.) (R.S.K.,J.)
6.12.2019
Index : Yes/No
Internet : Yes/No
ssk.
To
1. The State of Tamil Nadu,
rep. by the Joint Commissioner(CT) Chennai (South) Division, Chennai 600 006.
2. The State of Tamil Nadu, rep. by Joint Commissioner(CT) Coimbatore Division, Coimbatore.
3. Tamil Nadu Sales Tax Appellate Tribunal (Main Bench), Chennai
4. Tamil Nadu Sales Tax Appellate Tribunal (Additional Bench), Coimbatore
5. Tvl.Fisher Sanmar Limited, No.147, Karpagam Road, Chennai 600 086.
6. Tvl.Saravana Engineering Traders, No.12/15-A, Krishnasamy Mudaliar Road, R.S.Puram, Coimbatore 641 002.
http://www.judis.nic.in Judgt. dt. 6.12.19 in T.C.56 & 57/2019 State of TN v. Fisher Sanmar Ltd.
10/10
DR.VINEET KOTHARI, J.
and R.SURESH KUMAR, J ssk.
Tax Case Nos.56 & 57 of 2019 6.12.2019.
http://www.judis.nic.in