STATE OF TAMIL NADU Vs. AMEEN AND COMPANY

JUDGEMENT

(1.) THE department is the petitioner herein. THE assessee is a dealer in tanned hides. For the assessment year 1979-80, the assessee purchased wattle extract for a sum of Rs. 1, 28, 504. 56 from South India tanners and Dealers Association (hereinafter referred to as "association" ). THE assessing officer holding that the assessee was the last purchaser in the State, taxed the purchase of wattle extract under item No. 59 of the First Schedule to the Tamil Nadu General Sales Tax Act, 1959 (for short, "the Act" ). This order was confirmed by the Appellate assistant Commissioner on appeal. Aggrieved by the said order, the assessee filed second appeal before the Tribunal. THE Tribunal relying upon the various decisions, came to the conclusion that the sum of Rs. 1, 28, 504. 26 being the purchase turnover of wattle extract is not taxable, since the association did not sell the wattle extract to the assessee, but distributed the same to its members. Accordingly, the sum of Rs. 1, 28, 504. 26 was deleted. It is against that order, the State is in revision before this Court.

(2.) LEARNED Additional Government Pleader (Taxes)submitted that the assessee was the last purchaser of the wattle extract in the state and therefore, the purchase turnover is taxable under the Act. It was further submitted that the association did not act as the agent of the members. The association itself is a dealer and assessed to tax and therefore, what was said to be distributed by the association was sale of wattle extract liable to be taxed under the Act. It was further submitted that according to the explanation (1) to section2 (n) of the Act, the transfer of property involved in the supply or distribution of goods by a society, club, firm or any association to its members for cash or for deferred payment or other valuable consideration or not in the course of business shall be deemed to be a sale for the purpose of this Act and therefore, the distribution of wattle extract by the association to its members is to be considered as sale and purchase effected as a last purchase in the State. According to the learned Additional Government pleader, admittedly the respondent had purchased the wattle extract from the association and used the same in the tanning process. Since it was only an outright purchase from the association, the Tribunal was not correct in deleting the amount of Rs. 1, 28, 504. 26.