Madras High Court
The State Of Tamil Nadu vs Tvl.Sri Kumaran Textile Printers on 1 February, 2021
TCR.No.76 of 2019
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 01.2.2021
CORAM
THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAM
and
THE HONOURABLE MS.JUSTICE R.N.MANJULA
Tax Case Revision No.76 of 2019 & CMP.No.26149 of 2019
The State of Tamil Nadu, rep.
By the Deputy Commissioner (CT),
Salem Division, Salem. ...Petitioner
Vs
Tvl.Sri Kumaran Textile Printers,
Gobichettipalayam ...Respondent
REVISION under Section 38 of the Tamil Nadu General Sales Tax
Act, 1959 against the order dated 29.4.2002 passed by the Sales Tax
Appellate Tribunal (Additional Bench), Coimbatore made in CTSA.No.
568/2001.
For Petitioner : Mr.Mohammed Shaffiq, SGP
Order of the Court was made by T.S.SIVAGNANAM,J
This revision has been filed by the State under Section 38 of the
Tamil Nadu General Salex Tax Act, 1959 ('the Act' for brevity)
challenging the order dated 29.4.2002 passed by the Sales Tax
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TCR.No.76 of 2019
Appellate Tribunal (Additional Bench) (for short, the Tribunal)
Coimbatore in CTSA.No.568/2001.
2. We have heard Mr.Mohammed Shaffiq, learned Special
Government Pleader appearing for the petitioner.
3. The issue involved in this revision was answered in favour of
the Revenue in the decision of this Court, to which, one of us
(TSSJ) was a party, in the case of State of Tamil Nadu Vs. Tex-
in-Printers [reported in (2014) 70 VST 239]. Subsequently, it
appeared that there was a different view taken by another Division
Bench following the decision of the Bombay High Court, which
necessitated a reference to be made to the Hon'ble Full Bench wherein
it was held that the purchase of ink for printing polythene rolls is
taxable in terms of Section 3B of the Tamil Nadu General Sales Tax
Act, 1959/the Value Added Tax Act, 2006. The Hon'ble Full Bench
answered the reference in favour of the Revenue, wherein the relevant
portions are as follows :
“59. We therefore hold as follows:-
1.The judgment in State of Tamil Nadu
Vs. Premier Litho Works and another, (2009)
26 VST 205 (Madras), examined the question
whether a particular transaction is an inter-
state sale or a works contract. In the instant
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TCR.No.76 of 2019
case, there is no quarrel that the appellants
are involved in works contract. The judgment
is distinguishable on facts and on law and
reliance placed by the appellant on the said
judgment is totally misconceived. The 46th
Amendment to the Constitution of India and
the insertion of Clause 29-A in Article 366 and
Section 3-B(2)(e) of the Tamil Nadu General
Sales Tax , 1959, were not brought to the
attention of the Division Bench, since the issue
involved was entirely different.
2.The attention of the Division Benches
of this Court in Tax Case (MD).No.202 of 2012,
State of Tamil Nadu, rep. By the Deputy
Commissioner (CT), Tirunelveli Division,
Tirunelveli Vs. Tvl.Vibgyor Process, Kovilpatti,
(Tax Case (Revision) No.687 of 2006), State of
Tamil Nadu, rep. By the Deputy Commissioner
(CT), Tirunelveli Division, Tirunelveli Vs.
Tvl.Vibgyor Process, (2019) SCC Online Mad.
997, [WP.No.35213 of 2003], State of Tamil
Nadu, rep. By the Deputy Commissioner (CT),
Tirunelveli Division, Tirunelveli Vs.
Tvl.Mahalakshmi Process, Sivakasi, The State
of Tamil Nadu, rep. by. The Deputy
Commissioner (CT), Tirunelveli Division,
Tirunelveli Vs. Tvl.Subramanian Offset Printers,
and [WP.No.20324 of 1999], M/s.NPT Offset
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TCR.No.76 of 2019
(P) Ltd. Vs. The Joint Commissioner II and
another, were not drawn to the correct
position of law as repeatedly and consistently
pointed out by the Hon'ble Supreme Court and
are accordingly over ruled.
3.The correct position of law as
repeatedly and consistently pointed out by the
Hon'ble Supreme Court, finally in, State of
Karnataka Vs Pro Lab & Ors, (2015) 78 VST
451 (SC), is "to sum up, it follows from the
reading of the aforesaid judgment that after
insertion of clause 29-A in Article 366, the
Works Contract which was indivisible one by
legal fiction, altered into a contract, is
permitted to be bifurcated into two: one for
"sale of goods" and other for "services",
thereby making goods component of the
contract exigible to sales tax. Further, while
going into this exercise of divisibility, dominant
intention behind such a contract, namely,
whether it was for sale of goods or for
services, is rendered otiose or immaterial. It
follows, as a sequitur, that by virtue of clause
29-A of Article 366, the State Legislature is
now empowered to segregate the goods part
of the Works Contract and impose sales tax
thereupon. It may be noted that Entry 54, List
II of the Constitution of India empowers the
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TCR.No.76 of 2019
State Legislature to enact a law taxing sale of
goods. Sales tax, being a subject-matter into
the State List, the State Legislature has the
competency to legislate over the subject."
59. We therefore hold that since the
question of law has been resolved on the basis
of authoritative pronouncements of the Hon'ble
Supreme Court, it would be a fruitless exercise
to refer the Writ Appeal once again to the
Division Bench.
60. The Writ Appeal has no merits and it
is accordingly dismissed.”
4. Following the said decision, we are required to allow the
revision filed by the State. However, there would not be any such
necessity to do so in in the instant case because the matter is hit by
the State Litigation Policy as per G.O.(Ms.) No.105 Commercial Taxes
and Registration (D1) Department, dated 25.7.2019 wherein it has
been stated that the Revenue will not prosecute the appeals/writ
petitions/revisions, if the tax liability is less than Rs.5 lakhs, both in
respect of the assessment arising under the provisions of the Tamil
Nadu General Sales Tax Act, 1959 and the Tamil Nadu Value Added Tax
Act, 2006. It is not in dispute that in the case on hand, the tax liability
is less than the threshold limit of Rs.5 lakhs. Therefore, the Revenue
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TCR.No.76 of 2019
T.S.SIVAGNANAM,J
AND
R.N.MANJULA,J
RS
cannot prosecute the revision on account of the policy decision taken
by the Government of Tamil Nadu.
5. Therefore, while holding the legal position in favour of the
Revenue, we dismiss this tax case revision on the ground of the State
Litigation Policy. Consequently, the connected CMP is closed.
01.2.2021
To
The Sales Tax Appellate Tribunal (Additional Bench), Coimbatore.
TCR.No.76 of 2019 &
CMP.No.26419 of 2019
https://www.mhc.tn.gov.in/judis/
