STATE OF TAMIL NADU Vs. MANILAL AND COMPANY

JUDGEMENT

(1.) THE State has come up in revision against the order of the Sales Tax Appellate Tribunal wherein it held that the State of Tamil Nadu is not entitled to levy Central sales tax on the wire rods manufactured in the State of Tamil Nadu and sold to buyer outside the State. THE assessment year in question is 1980-81. THE assessee is a manufacturer of wire rods having its business in the state of Maharashtra.

(2.) IT has sent those rods to the State of Tamil Nadu for manufacturing welded mesh, out of those rods. The mesh so manufactured, which is a different commercial product, was then sold to buyers outside the State of Tamil Nadu. The movement of the goods so sold, viz. , the welded mesh commenced from the state of Tamil Nadu.

(3.) LEARNED counsel for the assessee, however, contended that since the tax has been paid in a wrong State, the court should direct that state to make over the amounts so collected by it to the State of Tamil Nadu. Counsel relied on the decision of the Supreme Court in the case of Bharat Heavy electricals Limited v. Union of India to contend that such a direction be given by this Court. Counsel relied upon the direction given by the court in that case, for the adjustment of the tax amounts collected between the concerned states to which the assessee had paid the tax, as there were rival claims from many States as to which one of them was the State competent to levy tax, on the transaction in question.