SHANMUGA TRADERS Vs. STATE OF TAMIL NADU

JUDGEMENT

(1.) The appeals and the writ petitions raise a common question of law relating to the validity of a circular dated 29th January, 1993 issued by the 1st respondent's Commissioner of Commercial Taxes. It needs to be reproduced in extenso :

(2.) The High Court, Madras in its judgment dated 13-3-1991 on TC No. 6/91 filed by Royal Steel Traders, Madras (1992) 1 MTCR 580 following its earlier judgment in the case of Vasu General Traders (1987) 66 STC 358 (Madras) has held that a sale has referred to taxable sale for the purpose of TNGST Act and not sales, which are exempted, and that since the Tamil Nadu Electricity Board was exempted, the first taxable sale was made only by the assessee. The clarification issued in the Commissioner of Commercial Taxes, reference cited are against the findings of the High Court, Madras in the case of Vasu General Traders (1987) 66 STC 358 and Royal Steel Traders (1992) 1 MTCR 580.

(3.) In the circumstances stated, it is held that when a person purchases scrap from the Tamil Nadu Electricity Board and sells, he is effectively the first seller liable for tax. This may be earlier purchase tax under S. 7-A of the Tamil Nadu General Sales Tax Act on this further sale depending on what that purchaser is doing with scraps. At any rate, it can no longer be considered second seller in (sic) not liable to tax. The Deputy Commissioners are requested to instruct the Assessing Officers that from the date of issue of this clarification, they will have to do all fresh assessments under this clarification and they need not open old assessments already completed under the earlier classification.