BRITANNIA INDUSTRIES LIMITED Vs. STATE OF TAMIL NADU

JUDGEMENT

(1.) These tax case revisions filed by the assessee are in respect of assessment years 1999-2000 and 2000-01. The following are the substantial questions of law raised in common in both these cases:

(2.) In so far as the second question of law with regard to the other item, viz., common salt is concerned, the case of the assessee is that they purchased common salt to be used in the manufacture of biscuits and other items by them. The claim of the assessee is that the common salt purchased by them and used in the manufacture of biscuits and other items, is an exempted item under entry 7 of Part B of the Third Schedule to the Tamil Nadu General Sales Tax Act and therefore, they are not liable to pay tax in respect of such item.

(3.) On the other hand, it is the case of the Revenue that the assessee is liable to pay tax as the usage of common salt by them in the manufacturing of biscuits and other items would fall under entry 62 of Part B of the First Schedule to the Tamil Nadu General Sales Tax Act as the salt is used for industrial purpose. According to the Revenue, since it is a salt for industrial use, the same would fall under entry 62 of Part B of the First Schedule and consequently the assessee is liable to pay tax. Therefore, the assessment order was passed by the assessing officer rejecting the claim of the assessee seeking for exemption under entry 7 of Part B of the Third Schedule in respect of the common salt used by them and levying tax and penalty under section 12(3)(b) of the Act. Challenging the said order of the assessment passed by the assessing authority, the assessee filed an appeal before the first appellate authority, who in turn by an order dated March 3, 2004 confirmed the order of assessment by agreeing with the findings of the assessing authority, that the common salt used by the assessee would fall under entry 62 of Part B of the First Schedule as the same is the salt used for industrial purpose. Further aggrieved by the said order of the first appellate authority, the assessee preferred an appeal before the Sales Tax Appellate Tribunal. The Tribunal also confirmed the order of the assessing authority as confirmed by the first appellate authority by holding that the common salt purchased and used by the assessee for industrial purpose would only fall under entry 62 of Part B of the First Schedule and would not attract exemption under entry 7 of Part B of the Third Schedule as claimed by the assessee.