V KRISHNAPPA CHETTIAR Vs. STATE OF TAMIL NADU

JUDGEMENT

(1.) THE revision petition has been filed under section 38 of the Tamil Nadu General Sales Tax Act, 1959 (hereinafter called the Act) against the order of the Sales Tax Appellate Tribunal dated 30th June, 1975, of Coimbatore Tribunal Appeal No. 343/74 and Coimbatore Tribunal Misc. Petition No. 37/75. THE assessee is a dealer in cotton and cotton seeds. He reported a total and taxable turnover of Rs. 3, 38, 94, 604. 97 and Rs. 21, 09, 505. 57 respectively in the A-2 return for the year 1972-73. In the absence of separate purchase figures for inter-State sales of cotton lint, the Joint Commercial Tax Officer held that the sales turnover would be treated as purchase turnover and assessed at 2 per cent. THE total turnover taxed by him came to Rs. 1, 05, 90, 401 consisting of Rs. 21, 20, 126 being the turnover in cotton seeds taxable at 3 per cent and Rs. 84, 70, 275 being the turnover taxed at 2 per cent. THE assessee appealed to the Appellate Assistant Commissioner. THE question raised before him was that the sum of Rs. 84, 70, 275 was arrived at in an arbitrary and illegal manner and that the Joint Commercial Tax Officer was wrong in taking the last purchase value of lint at the same figure as the sale value. THE Appellate Assistant Commissioner considered that for arriving at the purchase value the assessing officer should have deducted the gross profit of 3 per cent of the sale value of Rs. 84, 70, 275 and arrived at the purchase value of Rs. 82, 16, 167. He worked out the figure of purchase value of cotton taxable at Rs. 83, 00, 871. When the matter came up before the Tribunal at the instance of the assessee, the department filed an enhancement petition. It was pointed out in the said petition that both the assessing officer as well as the Appellate Assistant Commissioner had not arrived at the correct value of the purchase price of cotton and, according to the State representative, the purchase value should have been taken at Rs. 85, 25, 638. THE basis for arriving at this figure was set out in an enclosure to the enhancement petition dated 7th April, 1975. THE appeal came to be heard subsequently and before the hearing of the appeal, the assessee filed his objections to the proposed enhancement.

(2.) THE Tribunal accepted the figure as shown in the enhancement petition and directed that the sum of Rs. 85, 25, 638 should be taken into account as the purchase price of cotton, the purchase being the last one in the State. THEre was another point taken before the Tribunal, namely, that the assessee had effected all his purchases of cotton within the State and that cotton so purchased was unginned cotton. His submission was that to the extent of two-thirds of this purchase the price was referable to the cotton seeds and that in taxing at the rate of 3 per cent on the sales, there is double taxation because to the extent of the purchase price embedded in the sum of Rs. 85, 25, 638, the sales of cotton seeds to the extent of Rs. 21, 20, 126 has also been taxed. THE Tribunal did not accept this submission and, therefore, the result was that the turnover was directed to be enhanced by Rs. 2, 24, 767 from Rs. 83, 00, 871 to Rs. 85, 25, 638. THE assessee has questioned this order of the Tribunal in this revision before us. THE first point to be considered in this revision is whether the Tribunal in dealing with the appeal of the assessee was entitled to add to the turnover, as determined by the assessing authority, any further figure so as to enhance the assessment beyond the figure as appearing in the assessment order. In other words, according to the learned counsel of the assessee, the assessing authority having taxed only a sum of Rs. 84, 70, 275 as the purchase turnover in cotton, the Tribunal even when it accepted the enhancement petition, could not have travelled beyond this figure and brought to tax the sum of Rs. 85, 25, 638.

(3.) THE learned counsel for the assessee brought to our notice a recent decision of the Supreme Court in State of Kerala v. Vijaya Stores THE following passage in that decision was relied on :