HOTEL SHRI KANNAN Vs. STATE OF TAMIL NADU

JUDGEMENT

(1.) THE challenge in these batch of writ appeals and writ petitions is as to the power to levy purchase tax under Section 7-A of the tamil Nadu General Sales Tax Act (for brevity, "the Act") by the Revenue from the respective appellants/petitioners (for brevity, "the dealers") in the context of the Circular D. Dis. Acts Cell II/75893/99, dated 24. 12. 1999, as amended by the clarification No. 91/2000, D. Dis. Acts Cell ii/52300/2000, dated 4. 10. 2000 issued by the Revenue to the effect that the stock transfer of turmeric to other States is liable to purchase tax under section 7-A of the Act if it is purchased from unregistered dealers within the state; that purchase tax under Section 7-A of the Act is leviable only if the turnover of the dealer under the Act exceeds Rupees Three hundred crores in a year; that the exemption granted under Third Schedule to the Act is not a general exemption, but on conditional that the sale of turmeric by a dealer whose turnover exceeds Rupees three hundred crores per year does not fall under third Schedule; that since there is no other entry in the Schedules, such dealers are liable to pay tax at 11% under Entry 67 of Part-D of the First schedule; and that turmeric in any form such as balls, fingers and powder continue to be the same commodity, if tax was paid in one stage, the subsequent change in forms will not attract sales tax since it is only second sale of the tax suffered commodity.

(2.) CONCEDEDLY, the Revenue issued show causes notices to the dealers, who have escaped assessment of purchase tax and have purchased turmeric, an agriculture produce from either agriculturists, marketing committee, householders or unregistered dealers or in some cases from registered dealers. When such show cause notices were challenged in writ petitions, finding that such show causes notices are of pre-revision assessments and the dealers could raise their objections to the same, they were permitted to submit their objections with supporting materials and the Revenue was directed to consider the same and pass appropriate orders in accordance with law. As a result, writ appeals were preferred and other writ petitions challenging the show cause notices were tagged with the writ appeals.

(3.) WE have given careful consideration to the submissions of both sides.