Decided on April 11,1991



- (1.) Would the conversion of cream into butter by stirring, amount to a process of manufacture attracting the levy of purchase tax under Section 7A of the Tamil Nadu General Sales Tax Act, 1959 (hereinafter referred to as "the Act") This is the only question which requires our consideration in these revision petitions filed by the Revenue against the orders of the Sales Tax Appellate Tribunal (Additional Bench), Coimbatore, dated November 28, 1979, passed in C.T.A. Nos. 252 and 309 of 1979 and C.T.M.P. Nos. 230 and 212 of 1979. The circumstances in which this question arises are as follows :
(2.) The assessee in both these revision petitions is one and the same dealer, Bharat Diary Farm. The assessee sold butter converted from cream purchased by it. The sale of butter was reflected by the assessee in its returns and the accounts. The assessment in T.C.R. No. 586 of 1981 relates to the assessment year 1976-77 while the assessment in T.C.R. No. 857 of 1981 relates to the assessment year 1977-78.
(3.) The assessee had reported its taxable turnover for 1976-77 as Rs. 43,611.75 in the A1 return filed by it. The accounts were called and checked. An inspection by the Special Deputy Commercial Tax Officer (ST), Erode, at the business premises led to the recovery of two exercise note books and two pocket note books. Investigation revealed that for the assessment year 1976-77, there was purchase of cream for Rs. 68,701/-, which was not covered by purchase bills. According to the Revenue, the assessee had suppressed the purchase of cream in its returns. Consequently, assessment under Section 7A of the Act was made and the total and taxable turnover of the assessee was worked out at Rs. 1,23,216.75. Penalty under Section 12(3) of the Act was also proposed.;

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