ADITYA ENVIROTECH PRIVATE LIMITED Vs. COMMERCIAL TAX OFFICER

JUDGEMENT

(1.) THE petitioner has sought a writ of certiorarified mandamus, to quash the impugned records of the respondent in TNGST/0902571/2004 -05 dated October 16, 2006 and direct the respondent to grant concessional rate of tax at three per cent on the turnover of Rs. 19,57,784 covered by form XVII declarations in view of the settled principles of law as laid down by the first Bench of the Madras High Court in the case of Sree Murugan Engineering Products v. Commercial Tax Officer, Coimbatore reported in [2006] 148 STC 419 and in the case of Maruthi Handling Equipments v. Deputy Commercial Tax Officer reported in [2007] 7 VST 261 and also to grant an opportunity in respect of the disputed turnover of Rs. 7,84,600 in view of the circular dated April 20, 2001 in Acts cell -V/13234/ 2001 issued by the Special Commissioner of Commercial Taxes.

(2.) THE petitioner is a fabricator of air -handling unit technology, Chennai and an assessee on the files of the Commercial Tax Officer, Guindy. The petitioner reported their total and taxable turnover at Rs. 35,39,232 and Rs. 27,45,632, respectively, in their monthly returns filed under the Tamil Nadu General Sales Tax Act, 1959 for the assessment year 2004 -05. The assessing authority issued a pre -assessment notice dated May 22, 2006 and proposed to disallow, among other things, labour charges collection and first sale of air -handling unit against form XVII. The reasons contained in the pre -assessment notice dated May 22, 2006 for the proposal to disallow are as follows: Labour charges collection Rs. 7,84,600 : They have not produced their work order, labour bills, proof for receipt of material and proof for delivery of finished goods. In the absence of such details, it is proposed to disallow their claim for deduction from turnover, to treat the transaction as sale of air -handling unit; and to assess the turnover to tax at Rs. 20 per cent. Sale of air -handling unit against form XVH -Rs. 19,57,784 : The dealers have sold air -handling unit against form XVII. Air -handling unit is a finished product and can be used only as capital goods by the buyers. But it is not an item enumerated in the Eighth Schedule, so as to purchase against form XVII as capital goods. Hence, it is proposed to disallow their claim for concessional rate of tax and to assess this entire turnover of Rs. 19,57,784 to tax at 20 per cent.

(3.) ON receipt of the assessment order dated October 16, 2006, the petitioner by their letter dated November 28, 2006, enclosed further details in the form of the orders and invoices in respect of the labour charges of Rs. 7,84,600 and in respect of air -handling unit further clarified that the unit by itself cannot be used and the purchaser who purchased the same, installs the unit in its factory as an integral part of its machinery for manufacture of drugs and medicines and so requested that the respondent to revise the assessment order. The petitioner further submitted that as there was no response from the respondent, by letter dated July 31, 2007, reiterated the request made earlier and once again requested the respondent to revise the assessment by enclosing the drawings to show that air -handling unit was an integral part of the machineries of the purchasers and also enclosed a certificate issued by the purchaser to that effect.