STATE OF TAMIL NADU Vs. ARCOT CANS

JUDGEMENT

(1.) THIS judgment will dispose of T.C. (R) Nos. 141 to 144 of 1991 as they relate to different assessment years in respect of the same assessee and involve identical questions of law and facts. It was by a common order in T.A. Nos. 226 to 229 of 1988 decided on August 24, 1989, that the Sales Tax Appellate Tribunal, Main Bench, Madras, accepted the appeals of the assessee and set aside the orders of the authorities below.

(2.) THE only questions that arise for consideration are whether tin sheets could be said to have been "consumed" in the process of manufacture of tin containers and whether such purchases of tin sheets would attract purchase tax under section7-A of the Tamil Nadu General Sales Tax Act, 1959 " Section 7-A of the Act provides that every dealer who in the course of his business purchases from a registered dealer or from any other person, any goods, the sale or purchase of which is liable to tax under this Act, in circumstances in which no tax is payable under section 3, 4 or 5, and not being a circumstance in which goods liable to tax under sub-section (2) of section 3 or section 4, were purchased at a point other than the taxable point specified in the First or the Second Schedule and, inter alia, consumes such goods in the manufacture of other goods for sale or otherwise, shall pay tax on the turnover relating to the purchase aforesaid. THE expression "consumes" unmistakably suggests that the commodity which is said to, have been consumed loses its complete character, nature and identity in the manufacture of other goods, with a different and distinct character, nature and identity. Prior to the amendment of section7-A by the Amendment Act 78 of 1986, no tax could be levied on the goods "used" in the manufacture of other goods. It was by the Amendment Act 78 of 1986 that the expression Causes" was added in section 7-A so as to cover not only what was "consumed" but also what was "used" in the manufacture of other goods for sale or other wise under section 7-A. This amendment came into force from January 1, 1987. THE legislature, therefore, was conscious of the fact that prior to the amendment, the mere "use" of the goods in the manufacture of other goods did not attract the provisions of section7-A of the Act. It is only with effect from January 1, 1987 that even the "use" of such goods in the manufacture of other goods for sale or otherwise has been made liable to the levy of purchase tax under section7-A of the Act.