THE STATE OF TAMIL NADU REP BY THE DEPUTY COMMISSIONER (CT) SALEM DIVISION Vs. TVL MACWIN EXPLOSIVES AND ACCESSORIES (P) LTD

JUDGEMENT

(1.) This tax case has been remanded by the Hon'ble Supreme Court of India to examine the issues involved in the matter afresh in the light of the decision of the Supreme Court in Ashok Leyland Ltd. v. State of Tamil Nadu and Anr. , with liberty to the parties to implead other States if found necessary and with a further observation that in the event of creation of another forum by a Parliamentary Act, it would be open to the parties to approach the said forum.

(2.) The respondent is an Assessee on the file of the Deputy Commercial Officer, Hosur and having its registered Head Office and factory at Hosur with branch outside the State like Dhanbad and Nagpur. With respect to the assessment year 1986-87, the respondent [hereinafter referred to as 'the assessee'] reported a total and taxable turnover of Rs. 72,16,968/- and Rs. 38,81,255/-. The Assessing Officer determined the total and taxable turnover at Rs. 87,13,767/- and levied a penalty of Rs. 7,24,777/- on the ground that the turnover of Rs. 48,31,850/- was not correctly brought into account representing inter-State sales. The said Assessment Order was challenged by the assessee before the Appellate Assistant Commissioner.

(3.) Before the Appellate Authority, the assessee contended that the sales turnover to the tune of Rs. 48,31,850/- only represented 'stock transfer' to its branches for open market sale and therefore, the said turnover was not exigible to tax. It was their further contention that the sales transaction of inter-State sale to the tune of Rs. 38,81,917/- was required to be assessed at a concessional rate as the assessee had filed the necessary "C" Forms for the said transaction. The assessee also challenged the levy of penalty on the ground that computation of penalty at 150% of the tax due on the taxable turnover at Rs. 48,31,850/- was not sustainable as they have brought the turnover into the account and claimed exemption in respect of the said turnover by treating the same as 'stock transfer' to its branch for open market sale.