SHREE AMBIKA SUGARS LIMITED Vs. ASSISTANT COMMISSIONER

JUDGEMENT

(1.) The petitioner has approached this court challenging the order of assessment relating to the assessment year 2004-05, rejecting the claim of exemption under section 8 of the Tamil Nadu General Sales Tax Act, 1959. The petitioner herein is a public limited company, engaged in the manufacture of sugar in their factories at Eraiyur Village, Cuddalore District and Kottur Village at Thanjavur District. During the period 2003 to 2005, the petitioner imported raw sugar and after subjecting it to various processes, it converted the same into white refined sugar for sale locally. In the returns filed for the assessment year 2004-05, on the turnover relating to sale of white sugar, the petitioner claimed exemption under section 8 of the Tamil Nadu General Sales Tax Act, on the ground that the imported raw sugar and the processed and manufactured white sugar out of the imported raw sugar are two different commercial commodities; that sale of white sugar assessable under Chapter 1701 of the Central Excise Tariff is covered under entry I, Part A of the Schedule III of the Tamil Nadu General Sales Tax Act, thus qualifying for exemption from payment of sales tax. By proceedings dated May 29, 2008, the Commercial Tax Officer, Nungambakkam Assessment Circle, issued a notice, proposing assessment at the rate of four percent rate of tax, called upon the petitioner to furnish details of disposal of the imported sugar, apart from assessability of tax at four percent, the assessment would also result in the levy of penalty at 150 percent under section 12(3)(a). The petitioner replied to the same on June 23, 2008 and gave the details of raw sugar imported, processed into white sugar and the sales made therein. The petitioner took the contention that white sugar sold being a different commercial commodity from the imported raw sugar, the question of levying tax at four percent did not arise. In the reply dated March 9, 2011, it also narrated the various processes involved in bringing out the white sugar and the sufferance of excise duties and additional duty of excise on the clearance of white sugar manufactured. Under order dated April 29, 2011, the first respondent, however, rejected the claim of the assessee for exemption and held that the sale of sugar attracted four percent tax as falling under entry 61, Part B of the First Schedule. Apart from the issue on sugar, there are other issues considered in the assessment. As is evident from the averments in the affidavit, the petitioner had challenged those issues before the first appellate authority. On the question of taxability of the sale of white sugar manufactured out of the imported raw sugar, the present writ petition has been filed, challenging the assessment on grounds of jurisdiction to impose sales tax on the commodity subjected to additional duties of excise.

(2.) On notice, the Revenue has filed the counter-affidavit, contending that the writ petition has to be dismissed in limine on the ground of availability of effective alternative remedy of appeal to the petitioner herein. Without prejudice to the above, the first respondent also supported the order of assessment, on the sale of sugar as falling under the First Schedule.

(3.) The learned counsel appearing for the petitioner, taking me through the entries in the First and Third Schedules, brought to my attention the provisions of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 as well as on "sugar and sugar confectionary" in Chapter 17 of the Central Excise Tariff of India 2003-04 and 2004-05, containing the rates of duty on various types of sugar. He submitted that so long as the raw sugar imported by the assessee is not sold as such, but has been subjected to a manufacturing process to convert it into a different commercial commodity treated as so and the same had been subjected to duties of excise and additional duties of excise, the question of denying exemption under the Third Schedule, as such, does not arise. In any event, for the purpose of granting exemption under the Third Schedule, going by the wordings in S. No. 1 in Par A of the Third Schedule, payment of additional duties of excise is not a condition to be proved by the assessee. Referring to the fact that the Third Schedule contains a reference to the First Schedule to the Additional Duties of Excise (Goods of Special Importance) Act, 1957 only by way of identifying the goods which qualify for grant of exemption, he referred to the various processes that the raw sugar imported undergoes as amounting to manufacture, that the sale of white sugar is not the same as what is imported, to fit in with the entry under the First Schedule.