STATE OF TAMIL NADU Vs. SARASWATHY KURWATH DAMODARAN LEGAL HEIR OF KURWATH DAMODARAN PROPRETRIX COCHIN FISH CANNING COMPANY

JUDGEMENT

(1.) The State of Tamil Nadu has preferred this Tax Revision Petition under Section 38 of the Tamil Nadu Act (I of 1959) against the order of the Sales Tax Appellate Tribunal dated 19th January, 1971. The predecessor-in-interest of the respondent herein was dealing in sea foods in Kerala. Under the export promotion scheme be obtained an import licence for import of paper and paper boards in respect of the export of sea foods made by him. He utilised that licence by importing paper and paper boards and sold the same to Basanth Paper House, Madras. The turnover with reference to this transaction was Rs. 49,358.57 and sales tax was assessed at 2½ per cent. thereof. The dealer preferred an appeal to the Appellate Assistant Commissioner and the Appellate Assistant Commissioner dismissed the appeal. When the respondents preferred a further appeal to the Sales Tax Appellate Tribunal, the Tribunal allowed the appeal. The Tribunal held that the late Kurwath Damodaran being a dealer in sea food cannot have any intentions to carry on business in paper and paper boards and he had to sell such goods as he obtained under import licence and that being a solitary transaction and as Kurwath Damodaran was not a dealer in paper and paper boards, the transaction in question cannot be stated to be a sale in the course of business of Kurwath Damodaran, and under those circumstances the transaction not being a sale in the course of business was not taxable under the Act. It is the correctness of this decision of the Tribunal that is challenged by the State.

(2.) A perusal of the order of the Tribunal shows that on behalf of the respondent only three points were urged before the Tribunal. One was that the sale in question is in the course of import and hence not liable to sales tax under the Tamil Nadu General Sales Tax Act, 1959. The second was that the sale in question was an outside State sale and therefore not liable to tax under the Tamil Nadu Act. The third was that the assessee was not a dealer in paper and it is an isolated transaction and so it cannot be considered as a sale in the course of his business. The Tribunal held against the dealer on the first two grounds and only with regard to the third ground it accepted the case of the respondent. Consequently, the question that arises for consideration in this tax revision petition is whether the conclusion of the Tribunal or the third point urged on behalf of the respondent is correct or not. This in turn will depend upon the definition of the term dealer and 'business' under the Tamil Nadu Act. Section 2(d) defines the expression 'business' as follows:

(3.) The learned Counsel for the respondent contended before us that the definition of the term 'total turnover' occurring in Section 2(g) of the Tamil Nadu Act requires a person to have a place of business in the State for attracting the liability to tax and in this case the late Kurwath Damodaran did not have a place of business in the State when he sold the paper and paper boards in Tamil Nadu State and consequently he cannot be held liable to sales tax on the turnover relating to the sale of paper and paper boards in the State. It is not necessary for us to consider the correctness or otherwise of this contention because such a contention was not advanced before the Tribunal and the Tribunal therefore had no occasion to consider the same. It is not as if the question is a pure question of law because this will involve an investigation into as to whether the late Kurwath Damodaran had a place of business in Tamil Nadu State or not. Under these circumstances, the tax revision petition is allowed and the order of the Tribunal is set aside and the assessment on the turnover of Rs. 49,358.75 at 2½ percent, made by the Assessing Authority as confirmed by the Appellate Authority is restored. There will be no order as to costs.