NALVAR PROVISION STORES Vs. STATE OF TAMIL NADU
LAWS(STT)-1999-12-3
STATE TAXATION TRIBUNAL
Decided on December 22,1999

Nalvar Provision Stores Appellant
VERSUS
STATE OF TAMIL NADU Respondents

JUDGEMENT

L.Palamalai, Administrative Member. - (1.) WHILE the tax revision case in T.C. (R) No. 167 of 1999 is against the order of the Sales Tax Appellate Tribunal (Main Bench), Madras dated July 9, 1991 in upholding the levy of 10 per cent tax on the first sale of milk powder, the revision in T.C. (R). No. 2767 of 1997 filed by the Revenue is against the deletion of penalty under Section 12(5)(iii) of the Tamil Nadu General Sales Tax Act, 1959 (hereinafter called "the Act") in the abovesaid order of the Tribunal.
(2.) THE facts leading to the present revision cases are as follows : The assessing authority found that apart from misclassification of multi -point goods as exempted goods, the assessee also claimed exemption on the turnover of milk powder purchased from Bangalore (Nandhi brand and Indana Brand). Hence, adopting the book figures, the assessing authority brought to assessment the following mis -classified turnovers : (a) Milk powder falling under Rs. 33,695 taxable at 10 per cent. item 103(viii) of the First Schedule to the Act. (b) Mis -classified multi -point Rs. 2,796 taxable at 5 per cent goods Further, by a separate order, a penalty of Rs. 5,790 was levied under Section 12(5)(iii) of the Act for not reporting the correct taxable turnover and paying tax thereon. The petitioner preferred appeals against the orders levying tax and penalty and the first appellate authority by a common order, held that the decisions in State of Tamil Nadu v. Indodan Milk Products [1980] 45 STC 498 (Mad.) and Indodan Milk Products Ltd. v. Commissioner of Sales Tax, U.P [1974] 33 STC 381 (A11.)[FB] relied on related to condensed milk and that according to the substituted entry by Act 39 of 1983 from July 1, 1983, milk food including milk powder is taxable as per entry 103 of the First Schedule and therefore, levy of tax at 10 per cent is in order. As regards Section 12(5)(iii) penalty, the quantum was reduced to Rs. 1,930 being 50 per cent of tax due.
(3.) IN the second appeal, the Appellate Tribunal also upheld the levy of tax by following the ratio of the decision in Milk Food Limited v. Commercial Tax Officer, Bhowanipur Charge [1991] 81 STC 67 (WBTT) wherein it was held that "milk" and "milk powder" are not synonymous and hence, milk powder is not an item exempted from tax. As regards penalty, the Appellate Tribunal observed that the turnover of milk powder is included in accounts and there was no mala fide intention in not disclosing the same as taxable turnover and therefore, no penalty is warranted. Accordingly, the penalty sustained by the Appellate Tribunal was deleted.;


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