STATE OF TAMIL NADU Vs. ASIAN ENGINEERING COMPANY

JUDGEMENT

(1.) THE Revenue is in revision against the order of the Tamil Nadu Sales Tax Appellate Tribunal (Main Bench), Madras, dated July 27, 1979.

(2.) THE controversy lies in a narrow compass. THE assessee disputed before the Tribunal the liability to tax on the sale of rubber beltings under the Tamil Nadu General Sales Tax Act, 1959. THE plea of the assessee was that the sales of rubber beltings were covered by item 19 of the First Schedule to the Central Excises and Salt Act, 1944 and according to section14(iia) of the Central Sales Tax Act, 1956, they could not be brought to tax under the Tamil Nadu General Sales Tax Act. THE Tribunal after verification of the record held, keeping in view the process of manufacture of the rubber beltings, that they were to be treated as cotton fabrics falling under item 19 of the Central Excise Tariff and in the absence of the goods being provided for taxation under the Second Schedule to the Tamil Nadu General Sales Tax Act, they were declared to be not taxable under the Tamil Nadu General Sales Tax Act. On recording these findings, the Tribunal granted relief to the respondent-assessee on a turnover of Rs. 1, 93, 219.24 taxable at 3 per cent relating to the period from April 1, 1973 to March 3, 1974.

(3.) SECTION 4 of the Tamil Nadu General Sales Tax Act, 1959, dealing with declared goods provides that notwithstanding anything contained in section 3, the tax under the Tamil Nadu General Sales Tax Act shall be payable by a dealer on the sale or purchase inside the State of declared goods at the rate and only at the point specified against each in the Second Schedule on the turnover in such goods in each year, whatever be the quantum of turnover in that year. It is not disputed that so far as the product in question is concerned, there is nothing in the Second Schedule to the Tamil Nadu General Sales Tax Act, whereby the rate or the point of tax has been specified. The Tribunal after extracting tariff item 19 of the Central Excise Tariff found that the products of the assessee were essentially cotton fabrics covered by item 19 of the Central Excise Tariff and were consequently declared goods falling under section 14(iia) of the Central Sales Tax Act. Under section15 of the Central Sales Tax Act, 1956