SOUTHERN AUTOMOBILE INDUSTRIES Vs. STATE OF TAMIL NADU

JUDGEMENT

(1.) THESE two tax case appeals arise out of a common order of the erstwhile Board of Revenue made in B.P. Rt. No. 3912 of 1979 dated December 4, 1979.

(2.) THE brief facts leading to the filing of these two tax case appeals are as follows : THE appellant was allotted stainless steel sheets by the Director of Industries and Commerce for the purpose of manufacturing wind shield wiper arm blades for motor vehicles. From out of the stainless steel so allotted, the appellant manufactured stainless steel strips. THE manufactured articles, viz., stainless steel strips were subsequently sold to Tvl. Tamarai Steel House. Initially, the sales of these stainless steel strips were assessed to tax at 8 per cent, for the two assessment years in question, namely, 1974-75 and 1975-76, treating them as falling under item 109 of the First Schedule to the Tamil Nadu General Sales Tax Act. Subsequently, on the basis of the report of the Intelligence wing, the assessments on this part of the turnovers were revised, and the turnovers were brought to tax at 13 per cent treating the goods as component parts of automobiles falling under item 3 of the First Schedule to the Act.

(3.) MR. Venkataraman, learned counsel for the appellant, submitted that the Board of Revenue went wrong in holding that the articles sold by the appellant will fall under item 3 of the First Schedule to the Act, and as such exigible to tax at 13 per cent. According to the learned counsel, the Board of Revenue erred in taking into account the order of the allotment made by the Director of Industries. The stainless steel strips sold by the appellant cannot at all be used straightway as wiper blades to treat them as component part of the automobile. According to learned counsel, the view taken by the Appellate Assistant Commissioner and the reasons given by him in support of that view are unassailable, and the view taken by the Board of Revenue solely based on the allotment order cannot at all be sustained.