KONGOOR TEXTILE PROCESS Vs. JOINT COMMISSIONER CT REVISION PETITION OFFICE OF THE COMMISSIONER OF COMMERCIAL TAXES

JUDGEMENT

(1.) The Assessee is on writ petitions as against the order of the Joint Commissioner of Commercial Taxes relating to assessment year 1992-93 and 1993-94.

(2.) The Petitioner is a dyeing contractor who had effected interstate purchases of Dyes and Chemicals. Originally the Assessee was under the impression that chemicals purchased and used in the execution of the dyeing contract were exempted from tax under Section 3-B(2)(b) of the Tamil Nadu General Sales Tax Act. The tax liability on the cost of consumables like dyes and chemicals used in execution of dying was a debatable one involving question of law, there was no settled law on this issue and therefore, the assessing authorities kept the assessment pending 1986-87 onwards.

(3.) The Tamil Nadu Taxation Special Tribunal in the case of Perumal Colour Company and Ors. v. State of Tamil Nadu and Ors., 105 STC 223 remanded the matters relating to the dyeing contract to the respective Assessing Officers with the direction to demonstrate and to determine whether any transfer of property to goods was involved therein for the purpose of considering the same for chargeability. Based on that, there was a demonstration in the presence of members of the Tirupur dyer's Association. It was pointed out that in the case dyes, there was 50% of transfer of property and in the case of chemicals, there was no transfer of property at all. Based on the resolution, the Assessee paid the taxes on 50% of the dyes used in the dying contractor. By filing a revised return admitting the liability to the extent of 50% on the dyes used, the assessment was finalised. Having regard to the admission, the Assessee paid the tax thereon under the revised return. After adjusting the demand raised with tax paid to the extent of Rs. 53,981/- voluntarily under the revised return in the form of interest, penalty was levied under Section 24(3) of the Act to the extent of Rs. 53,981/-. Aggrieved by this, the Assessee went on revision before the Deputy Commissioner, who dismissed the revision petitions. Hence, the Assessee went on further revision before the Joint Commissioner.