KARPAGAMBAL MILLS LIMITED Vs. STATE OF TAMIL NADU

JUDGEMENT

(1.) THE assessee, who is the petitioner herein, was assessed to sales tax, among other things, on a turnover of Rs. 38, 588 being the sale proceeds of a Benz Car, 1968 model, TMZ 905, sold by the assessee on 30th July, 1979, to one Gandhimathi Estate, South Coorg. THE assessment as regards that turnover was challenged by the assessee on the ground that he is not a dealer in cars and that he is only a textile manufacturer and therefore sales tax cannot be levied on a casual sale like the sale of used car. That contention of the assessee was rejected by the assessing authority on the ground that though the assessee is not dealing in cars, he has sold the car incidentally in the course of his business and that, therefore, in view of the decision of the Supreme Court inState of Tamil Naduv. Burmah Shell Co. Ltd., even casual transactions of sale which is incidental to the main business of the assessee are taxable under the Tamil Nadu General Sales Tax Act. THE assessee appealed before the Appellate Assistant Commissioner, disputing amongst other things, his liability to pay sales tax on the sale of the used car. Before the Appellate Assistant Commissioner, the assessee contended that even if the sales turnover of the car could be brought to charge, since the sale was a second sale in the State, it is not liable to be taxed. THE Appellate Assistant Commissioner held that since the assessee has purchased the car from one Hukami Chand, who is only a private person and not a dealer, the assessee's sale is the first taxable sale in the State and therefore, the assessee cannot escape the liability of payment of sales tax on the sale of his car. THE matter was taken to the Tribunal by the assessee, contending that his sale being a second sale, it cannot be taxed under the provisions of the Act. THE Tribunal also held that since the person from whom the assessee had purchased the car is not a dealer doing business transactions, the assessee's sale has to be taken as the first sale and therefore, the assessment on the sales turnover of the car cannot be questioned. Aggrieved by the decision of the Tribunal, the assessee has come before this Court.

(2.) ACCORDING to the learned counsel for the assessee, the facts of this case clearly attract the decision of this Court inState of Tamil Naduv. Chamundeswari Enterprises and therefore, the assessment on the sales turnover of the used car has to be set aside. As against this, the learned Government Pleader contends that though the sale is found to be a second sale, the earlier sale is not a taxable sale, and therefore, the assessee is not entitled to claim the benefit of exemption on the ground that his sale is a second sale in view of the decision of this Court in Govindan & Co. v.State of Tamil NaduThere is no dispute as regards the facts. One Hukami Chand of this State has purchased the car from a party in Karnataka State. From the said Hukami Chand, the assessee has purchased the car after Hukami Chand had used the car for some years. Thereafter, the assessee had sold the car which he had purchased from Hukami Chand earlier, during the assessment year 1979-80. On these admitted facts, question is, whether the assessee can claim exemption on the ground that his sale is the second sale within the State.