METTUR INDUSTRIES Vs. STATE OF MADRAS

JUDGEMENT

(1.) MESSRS. Mettur Industries Ltd. , are the petitioners in this tax revision case. These proceedings arose out of the assessment for the year 1951-52. The Deputy commercial tax Officer, ascertained the net assessable turnover of this assesses at rs. 2,40,87,084-0-7. Objections were taken to this assessment by the assessee and an appeal was filed to the Commercial-tax Officer, but that appeal was dismissed. The objections were repeated in a further appeal by the assessee to the tribunal.

(2.) THE objections taken, by the assessee fell under three heads; (1) a sum of Rs. 23,66,029 claimed to be the turnover arising from inter-State sales, the exemption claimed being under Article 286 (2) of the Constitution; (2) Rs. 19,41,362 being the turnover on the purchase value of cotton purchased, by the mills from Messrs. Volkart Bros. ; and (3) Rs. 2,24,517 being the sales-tax collections made by the appellant, to the inclusion of which in the assessable turnover objection was taken. The first item of the claim under the head of exemption by reason of the sales being of an inter-State character was allowed by the Tribunal, and is no longer in dispute before us. The third of the items, viz. , the inclusion in the turnover of the sales-tax collected by the assessee is now validated by Madras Act 7 of 1954. This was disallowed by the Tribunal, and because of the validating enactment, this was not contested before us. The only matter now in controversy relates to Item (2), viz. , the turnover of Rs. 19,41,362 being the value of the cotton purchased during the year by the mills.

(3.) SECTION 3 (1), Madras General Sales Tax Act, enacts, "every dealer shall pay for each year a tax on his total turnover for such year;" This is subject to the provisions of Section 5, Sub-section 2 of which enacts: