PHILIPS INDIA LIMITED Vs. ASSISTANT COMMISSIONER CT

JUDGEMENT

(1.) In order to appreciate the contentions raised on behalf of the parties, it is necessary to notice the relevant provisions in a historical perspective. Section 2(1)(a) of the Tamil Nadu Additional Sales Tax Act, as it stood prior to 1.8.1996, was to the following effect:- Section 2: Levy of additional tax in the case of certain dealers. -- (1)(a) The tax payable under the Tamil Nadu General Sales Tax Act, 1959 (Tamil Nadu Act 1 of 1959) (hereinafter in this section referred to as the said Act), shall, in the case of a dealer whose taxable turnover for a year exceeds ten lakhs of rupees, be increased by an additional tax calculated at the following rates, namely : Rate of Tax

(2.) The aforesaid provision was amended by Act 31 of 1996 and in place of the expression dealer, the words a casual trader or agent of a non-resident dealer or a local branch of a firm or company situate outside the State was substituted. The amending Act also provided for insertion of clause (aa) after clause (a) to the following effect :- (2. Levy of additional tax in the case of certain dealers. -- (1)(aa) The tax payable under the Tamil Nadu General Sales Tax Act, 1959 (Tamil Nadu Act 1 of 1959) (hereinafter in this section referred to as the said Act), shall, in the case of a dealer including the principal selling or buying goods through agents whose taxable turnover for a year exceeds one hundred crores of rupees, be increased by an additional tax calculated at the following rates, namely : Rate of Tax (i) Where the taxable turnover exceeds one hundred crores of rupees but does not exceed three hundred crores of rupees. 2.5 per cent of the taxable turnover (ii) Where the taxable turnover taxable turnover 3 per cent of the taxable turnover Explanation 1. - Taxable turnover for the purpose of this clause in respect of a principal selling or buying goods through agents shall be the aggregate taxable turnover of all his agents relating to the sale or purchase of the goods of such principal within the State.

(3.) Such amendment came into force with effect from 1.8.1996. The nett result of such amendment was to the effect that the registered dealers within the State were liable to pay additional sales tax only if their taxable turnover exceeded Rs.100 crores, whereas, a casual trader and agent of a non-resident dealer and a local branch of a firm or company situated outside the State were liable to pay additional tax if their taxable turnover exceeded Rs.10 lakhs. Of course the additional sales tax payable varied according to quantum of taxable turnover.