T NATARAJAN Vs. STATE OF TAMIL NADU

JUDGEMENT

(1.) THE assessee is the appellant herein. Thiru T. Natarajan and Bros. , Valangaiman, are dealers in coconuts. THE assessee was assessed on a total and taxable turnover of Rs. 55, 71, 964 and Rs. 2, 58, 690 respectively for the year 1986-87, against the declared turnover of Rs. 55, 71, 964 and Rs. 2, 58, 690 respectively. In view of the defects found in the accounts, the assessing officer rejected the accounts and made the best judgment assessment. On appeal before the Appellate Assistant Commissioner, the assessee contended that the tax levied on the sales turnover of gunnies used as packing materials sold along with coconuts is not justified. Coconut is a commodity liable for exemption. If the content is exempt, the container is equally eligible for exemption and the container is taxable at the rates applicable to the contents. Relying upon the provisions of section3 (7) of the Tamil Nadu General Sales Tax act, 1959, as it stood prior to the amendment, the department contended that inasmuch as the packing materials were charged separately, tax is leviable on the container. However, the Appellate Assistant Commissioner held that when the content is not taxable, the container is also not taxable. Accordingly, he set aside the order of the assessing officer and allowed the appeal.

(2.) THE Joint Commissioner scrutinised the order passed by the Appellate Assistant Commissioner. He was of the view that the order passed by the Appellate Assistant Commissioner in exempting the tax on gunny bags would amount to erroneous and prejudicial to the interest of the Revenue. Accordingly, he exercised his suo motu power under section 34 of the Tamil Nadu general Sales Tax Act, 1959. THE Joint Commissioner, after hearing the learned counsel appearing for the assessee as well as the departmental representative and relying upon various decisions, held that the Appellate Assistant commissioner was not correct in setting aside the order passed by the assessing officer and accordingly the Joint Commissioner set aside the order passed by the Appellate Assistant Commissioner and restored the assessment made by the assessing officer. It is against this order, the present appeal has been preferred by the assessee.

(3.) T. C. M. P. No. 91 of 1997 : Since the main case, the appeal itself is allowed today, the above T. C. M. P. is dismissed. .