LAWS(MAD)-1997-8-40

STANDARD MATCH INDUSTRIES Vs. STATE OF TAMIL NADU

Decided On August 04, 1997
STANDARD MATCH INDUSTRIES Appellant
V/S
STATE OF TAMIL NADU Respondents

JUDGEMENT

(1.) THE common question raised in these two cases is as to whether the payments alleged to have been voluntarily made by customers for specific charity form part of consideration for the sale of the goods for the purpose of levy of tax under the Central Sales Tax Act.

(2.) THE relief claimed in these two cases is for the exclusion of a sum of Rs. 1, 25, 011 from the turnover of M/s. Standard Match industries for the assessment year 1979-80 (CST) and for setting aside the levy of a sum of Rs. 2, 500. 22 as tax thereon, and for the exclusion of a sum of Rs. 53, 179. 59 from the turnover of Standard Match Industries (E) Unit for the assessment year 1979-80 (CST) and setting aside the levy of Rs. 1, 064. 00 as tax on that sum.

(3.) IN the case of Commissioner of INcome-tax (Central), new Delhi v. Bijli Cotton Mills (P) Ltd. (supra) the apex Court considered the claim of the assessee for exemption under section 4 (3) (i) of the INcome-tax act, 1922. The assessee's contention was that the amounts realised from customers who had paid the additional amounts could not be regarded as income of the assessee, and therefore, could not be subject to levy of income-tax. As observed by court at para 6 of the judgment, the question, which arose for consideration in those appeals were as to (1) what is the true nature or character of these receipts, whether they constitute a part of the price received by the assessee effecting sales of yarn or cotton and are, therefore, trading receipts of the assessee and (2) whether these realisations were property held under trust or other legal obligation for charitable purposes.