BRITANNIA INDUSTRIES LIMITED Vs. STATE OF TAMIL NADU

JUDGEMENT

(1.) T.C. Nos. 9 and 10 of 2011 are at the instance of the assessee relating to assessment years 1999-2000 and 2000-01 respectively.

(2.) It is seen from the documents placed before this Court that the assessee was originally assessed for the said assessment years under the provisions of Tamil Nadu General Sales Tax Act. On verification of the records, it was seen that the assessee purchased edible oil from a registered dealer and that the edible oil was used as raw material for manufacture of biscuits. The assessee had placed these details before the Enforcement Wing Officers on 5.3.2004. As per notification in G.O. No. 109 CT & RE dated 7.4.98, the sale of edible oil was exempted if the sales turnover of the dealer was not more than Rs.100 crores. This turnover limit was subsequently raised under G.O. No. 93/CT dated 2.6.2002 effective from 1.4.99 to Rs.300 crores. Considering the said Government Order, the Assessing Authority viewed that the purchase of edible oil which had not suffered tax for use in the manufacture, attracted charge under Section 7A of the Tamil Nadu General Sales Tax Act. Accordingly, assessments were re-opened under Section 16(1)(a) of the Tamil Nadu General Sales Tax Act. After giving opportunity to the assessee, the assessment was thus confirmed. Aggrieved by the said assessment, the assessee went on appeal before the Deputy Commissioner (Appeals), who upheld the assessment. However, as regards the turnover of Rs.10,64,222/-, being the difference in the turnover relating to purchase of edible oil, the same was remanded back to the Assessing Officer for fresh consideration to examine as to whether the said turnover had any basis for inclusion in the purchase turnover taxable under Section 7-A(1)(a) read with Section 16(1) of the Act. As regards penalty, the Deputy Commissioner (Appeals) refixed the same.

(3.) In respect of assessment year 2000-01, similar exercise was taken by the Assessing authority to revise the assessment, which was also taken on appeal before the Deputy Commissioner (Appeals), who confirmed the assessment made under Section 7-A of the Tamil Nadu General Sales Tax Act. Aggrieved by the same, the assessee went on appeal before the Sales Tax Appellate Tribunal wherein the assessee contended that in respect of exempted transactions under G.O. there could be no liability at all under Section 7-A of the Tamil Nadu General Sales Tax Act. Given the object of introduction of Section 7-A of the Act, the reassessment made on the assessee was not sustainable. The Tribunal pointed out that considering the restricted nature of exemption notification, Section 7-A of the Act stood attracted to the facts of the case. Thus, the appeals filed by the assessee were rejected. However, as regards levy of penalty, the Tribunal set aside the same by holding that the assessee could not be held guilty of wilful non-disclosure of assessable turnover. Aggrieved by the same, the assessee is on revision before us by raising the following substantial questions of law: