GENLITE PRIVATE LTD Vs. STATE OF TAMIL NADU

JUDGEMENT

(1.) The above Tax Case Revision is filed at the instance of the assessee as against the order of the Sales Tax Appellate Tribunal for the assessment year 1994-95. The above Tax Case Revision was admitted on the following substantial questions of law:

(2.) The assessee/petitioner herein is a dealer in diesel engine generators and they are carrying on the job work of erection and commissioning of diesel engine generators. It is seen from the facts narrated that the assessee had a work contract with the Telecommunication department, Government of India for supply, installation, testing, commissioning of diesel generating set. The work was undertaken as a continuous process, resulting in payments made partly on supply of diesel generating sets and on installation, testing and commissioning and the balance on completion of warranty period. On completion of the work and on installation, the petitioner raised bill and paying tax on 70% of the receipts made by them. They claim exemption on 30% towards labour charges. Based on the inspection made by the Enforcement Authorities, the Assessing Officer verified all the sales invoices raised by the assessee and found that the dealer effected sales to the Government department to the tune of Rs.43,96,018/- and reported only 70% of the said amount as taxable turnover in the monthly returns filed by them for the assessment year 1994-95. Thus, the Assessing Officer allowed the exemption claimed at 30% towards labour charges and determined total and taxable turnover and levied tax. In the assessment order, the Assessing Officer also found that the dealer collected 12% sales tax as against 4% on the sales to the Government department. As such, the Assessing Officer proposed to levy penalty under Section 22(2) of the Tamil Nadu General Sales Tax Act. After hearing the assessee's objection, the Assessing Officer confirmed the assessment.

(3.) Aggrieved by this, the assessee went on appeal before the Appellate Assistant Commissioner of Commercial Taxes, who found that the assessee had charged separately for labour charges and separately for the supply of materials. The assessee had also undertaken supply on fixing up of exhaust pipes, fuel pipes and thermal installation, over spread relay etc. In the circumstances, the First Appellate Authority found that after allowing 30% towards labour charges, taxable turnover determined by the Assessing Officer was correct. Apart from that, the First Appellate Authority, while considering the claim of the assessee for exemption under Section 3(B) (2-a), held that when the assessee had not produced any proof to the effect that they purchased the entire materials involved in the execution of works contract from outside the State, the question of grant of exemption did not apply. Thus, the appeal filed by the assessee was rejected.