RADHAKRISHNA MILLS LIMITED Vs. STATE OF TAMIL NADU

JUDGEMENT

(1.) IN these three writ petitions, a common question arises. The three petitions relate to orders of revision made by the assessing officer said to be in exercise of his powers under section 16 of the Tamil Nadu General Sales Tax Act, 1959 read with section 9 of the Central Sales Tax Act. The years of assessment are 1964-65, 1965-66 and 1966-67. As the facts are almost similar except for the difference in the numerals, I shall refer to the facts in Writ Petition No. 1630 of 1970.

(2.) THE case of the revenue is that for the assessment year 1966-67, a certain turnover has escaped assessment. THE petitioner has some depots particularly in Calcutta and Bombay. But it carries on business in the State of Tamil Nadu. THE petitioner-mills was originally assessed to Central sales tax by an order of the Joint Commercial Tax Officer, Singanallur Division, Coimbatore, on 14th December, 1967. From the records it is seen that the assessing officer went into the account books, the sale bills and all other necessary materials and granted exemptions in the matter of payment of Central sales tax on the foot that certain sales were made outside the State. Later, the petitioner was informed once again by the assessing authority by a notice dated 24th January, 1970, that the turnover in respect of which exemption was granted and gained by the petitioner was not exemptable in the eye of law, as according to the assessing authority who was revising the original assessment, there were contrast for the sale of yarn at the Calcutta depot to which destination, goods were sent and such despatches were in fulfilment of those contracts.

(3.) FAIRLY enough, the respondent has summarised the gist of the documents produced before him at the time of the purported revision. The documents produced showed the course of transactions as follows :(1) Bulk quantities of yarn were despatched by Radhakrishna Mills Ltd., Coimbatore. (2) The goods were despatched to the Radhakrishna Mills Ltd., Calcutta, and not to any particular person or buyer. (3) The goods were cleared by their agents at Calcutta and expenses were debited to them. (4) After clearance, the goods were sold at the discretion of the agents to a few of the several buyers with whom contracts were pending as on the date of despatch. After having noticed that such was the reflection from the records, the assessing authority though that the goods moved pursuant to definite contracts of sale and that, therefore, there was an escapement of assessment and after interpreting certain conditions of the contract which the depot agent entered into with the prospective buyers at Calcutta, came to the conclusion that the transactions should be deemed to be inter-State sales within the meaning of section 3(a) of the Central Sales Tax Act and not out of State sales, which automatically gain an exemption from being included in the assessable turnover under the Central Sales Tax Act. I have already referred to the fact that the order of the first assessing authority excluding the turnover in question on the ground that the petitioner was entitled to exemption because the transactions were out of State sales was well-founded. But the revising authority took a contrary view in spite of the correct summary of the facts and events seen by him and attributable to the course of commercial activity of the petitioner in the instant case. Finally, under the impugned order, the respondent held that there was an escapement of a turnover and caused a further notice in the usual form to be issued and called upon the petitioner to pay such Central sales tax.