RANI WASTE PAPERS Vs. STATE OF TAMIL NADU

JUDGEMENT

(1.) THE appellant claims to be mainly a dealer in waste paper and boards. He also undertakes an ancillary business of cutting papers on cooly basis, whenever they are asked to do such work on paper or broad. It is stated that some of the purchasers of paper and board would request the assessee to have the paper or board cut to particular sizes. For the assessment year 1977-78 the assessee returned a total turnover of Rs. 5, 99, 536 and a taxable turnover of Rs. 4, 00, 779.08. Certain defects were noticed by Inspection Squad on July 20, 1977 and among other things a sales turnover of Rs. 82, 104.42 was found to come under entry 117 of the First Schedule of the Tamil Nadu General Sales Tax Act, 1959 (hereinafter called "the Act") taxable at 8 per cent, whereas the assessee had claimed the said turnover as falling under multi-point goods under section3(1) of the Act. In reply to the pre-assessment notice the assessee represented that he had purchased "II odd size" wood boards from M/s. Everest Paper Mills (Private) Limited, Calcutta, and that they were only waste boards. He therefore contended that such waste boards will not fall under entry 117 of the First Schedule to the Act, and claimed the general multi-point rate at 4 per cent prevailing during the period. THE assessing authority found that the assessee had purchased "white duplex board" for Rs. 73, 307.52 and had sold the same for Rs. 82, 104.42. He therefore assessed the sale of boards at 8 per cent under entry 117 of the First Schedule to the Act.

(2.) ON appeal the Appellate Assistant Commissioner agreed with the assessee that the assessee had treated the commodity as waste and buyers also had purchased it as waste boards for use as raw materials in the manufacture of fire-works. The appellate authority while accepting the assessee's plea simply copied the statement in the ground of appeal as follows :

(3.) IN this case apart from the above legal aspect of the case, it is found that factually the assessing authority taxed the turnover of Rs. 82, 104.42 only as first sales of boards. There is no indication at all the boards were sold as waste boards. Neither in the reply to the pre-assessment notice nor in the grounds of appeal before the appellate authority or in the reply to the notice of the Joint Commissioner, has the assessee claimed that the boards purchased from Calcutta had been mixed with other waste papers and sold only as waste papers. The appellate authority had merely adopted ipse dixit of the assessee in the grounds of appeal. We are convinced that the appellate authority fell into an error while holding that the turnover was assessable only at multi-point rate and not under entry 117 of the First Schedule. The Joint Commissioner was fully justified in invoking the suo motu powers and setting aside the order of the appellate authority. Consequently, the appeal has no merits and accordingly it is dismissed. However, there will be no order as to costs.