STATE OF TAMIL NADU Vs. P JANARDHANAN

JUDGEMENT

(1.) THIS is Revenue's revision against the order of the Tamil Nadu Sales Tax Appellate Tribunal (Additional Bench), Coimbatore, dated April 14, 1981, and arises in the following circumstances :

(2.) THE respondent is an assessee in the books of the Deputy Commercial Tax Officer, Coimbatore Rural Assessment Circle. He was assessed under the Tamil Nadu General Sales Tax Act, 1959 (hereinafter referred to as "the Act") on a total and taxable turnover of Rs. 7, 70, 028 to best of judgment in assessment proceedings by the assessing authority, i.e., the Deputy Commercial Tax Officer, Coimbatore, dated December 31, 1979 for the year 1978-79. THE taxable turnover was determined by the assessing authority in the following manner : Sale of packing cases Rs. 4, 30, 513.32 at 4% Sales of cut waste Rs. 35, 951.72 at 4% Purchase value of timber consumed in the manufacture of packing cases Rs. 3, 03, 563.05 at 5% Total taxable turnover Rs. 7, 70, 028.09 Rounded off to Rs. 7, 70, 028.00 THE assessing authority, while arriving at the taxable turnover, disallowed the claim of the assessee on the turnover of Rs. 35, 951.72 as firewood and also assessed the sum of Rs. 3, 03, 563.05 under section7-A of the Act at 5 per cent. Aggrieved, the assessee preferred an appeal.

(3.) THE Additional Government Pleader (Taxes), appearing for the Revenue in this revision, submitted that the finding of the Tribunal that the purchase turnover of Rs. 3, 03, 563 was not subject to tax at 5 per cent under section 7-A was erroneous inasmuch as the assessee had converted the cut-ends of wood into sized timber and had manufactured packing cases out of the same. It was argued that since the purchased timber was consumed into the manufacture of packing cases, the purchases were liable to be taxed under section7-A of the Act. We cannot agree. Before the Tribunal, the plea of the assessee that he did not manufacture any packing cases but only sized the cut-ends into planks and shooks and sold them as such was accepted as a fact. It would be relevant to notice the following observations of the Tribunal in that behalf :