STATE OF TAMIL NADU Vs. ASHOKA MOTORS

JUDGEMENT

(1.) THE State has come forward with this revision challenging the order of the Tribunal dated April 7, 1995 passed in Tribunal Appeal No. 378 of 1993.

(2.) THE short facts are that the respondent herein purchased a chassis which suffered tax at that point of sale. The respondent, thereafter, erected a body over it and after using the complete unit, sold the new product, namely, the lorry to a third party, for which, the assessing authority, by its order dated January 31, 1992 determined the tax in a sum of Rs. 36, 113, along with surcharge and additional surcharge. The contention of the respondent before the lower appellate authority was that the chassis purchased by it, having already suffered tax once, was not liable to be taxed again after the body was built over it. The Tribunal having accepted the case of the respondent, the State has come forward with this appeal.

(3.) IT would be appropriate to refer to the principle stated in Tamil Nadu Mosaic Manufacturers Association v. State of Tamil Nadu [1995] 97 STC 503 (Mad) to appreciate the stand of the petitioner herein. The Division Bench, as proposition of law, has laid down the ratio to the following effect (at page 514):. The settled position of law is that whenever a commercial commodity which has suffered sales tax is transformed into another distinct commercial commodity, it becomes a separate and distinct commercial commodity for the purposes of levy of sales tax and it can be taxed again and in such a case, Section 15(a) of the Central Sales Tax Act will have no application. When the dealer purchases a commercial commodity which has suffered sales tax and out of such commercial commodity purchased by the dealer, he manufactures another distinct commercial commodity and uses the same in the execution of works contract, the commercial commodity purchased by the dealer is not used in the execution of the works contract in the same form in which it is purchased and in such a case what is used in the execution of the works contract is a distinct and different commodity though manufactured out of the commodity purchased by him and which has suffered sales tax..