MAHALAKSHMI SPINNERS Vs. STATE OF TAMIL NADU

JUDGEMENT

(1.) THE appellants have filed this appeal against the order of the Joint Commissioner made in exercise of the suo motu powers of revision. Brief facts are as follows :

(2.) THE assessing authority determined the taxable turnover of the assessees as Rs. 25, 85, 220.24 including Rs. 11, 52, 542.58 at 3 per cent, representing the last purchases of inferior variety of cotton. An appeal was preferred by the assessees before the Appellate Assistant Commissioner, where it was contended that the assessing authority was not justified in levying tax on the purchase of "cotton waste" treating it as inferior cotton. It was pleaded that cotton waste was liable to be taxed on the first sale under item 16 of the First Schedule. THE plea of the assessees found favour with the Appellate Assistant Commissioner who held that the assessees had purchased cotton waste and the same could not be treated as inferior variety of cotton, making it liable to tax at the point of last purchase at the hands of the assessees. THE Appellate Assistant Commissioner, therefore, deleted the levy of tax at 3 per cent in respect of the turnover of Rs. 11, 52, 542.58. THE Joint Commissioner, however, proposed to revise the order of the Appellate Assistant Commissioner, in exercise of the suo motu powers of revision and consequently, a notice was issued to the assessees and their objections invited. After considering the objections and hearing the parties, the Joint Commissioner, on the basis of the material on the record, came to the conclusion that the purchase bills of the assessees did not disclose the commodity as cotton waste and on the other hand, it was inferior quality of cotton. THE Joint Commissioner accordingly set aside the order of the Appellate Assistant Commissioner and brought to assessment the turnover of Rs. 11, 52, 542.58 at 3 per cent as last purchase of cotton. THE assessees have filed this appeal.

(3.) THAT inferior quality of cotton and cotton waste are two different and distinct commodities is not a matter in dispute. Cotton waste cannot be held to be an inferior variety of cotton merely from the circumstance that the yarn that is spun out of the same is low count yarn. There is a significant distinction between cotton waste and inferior quality of cotton. The Joint Commissioner considered the objections of the assessees to the proposal to revise the order of the Appellate Assistant Commissioner. He noticed that it was the case of the assessees themselves that they had purchased the commodity in question mostly from other dealers in cotton and that only a small quantity had been purchased from the spinning factory and nothing had been purchased at all from the spinning mills. The Joint Commissioner also referred to the purchase bills of the assessees and noticed that the purchase bills did not disclose the commodity as "cotton waste" and went on to observe : "The dealers had not produced evidence that their purchases were from the spinning mills. They had not discharged their burden. The department is concerned only with the evidence produced before it and the evidence in the form of purchase bills produced before it declared the goods as inferior cotton and not as a cotton waste." * This finding was recorded by the Joint Commissioner on the basis of the material on record and since the assessees had failed to prove that the purchases effected by them were at any point of time cotton waste, their pleas were rightly rejected by the Joint Commissioner, who set aside the order of the Appellate Assistant Commissioner. The order of the Joint Commissioner is based on material on record and the evidence available on record in the form of purchase bills of the assess themselves. The order of the Joint Commissioner, therefore, does not suffer from any error and the proposal to bring to assessment the turnover of Rs. 11, 52, 542.58 to tax as last purchase of cotton was rightly confirmed by the Joint Commissioner. There is, thus, no merit in this appeal. It fails and is dismissed. No costs.