NAYAN COLOUR LAB Vs. STATE OF MADHYA PRADESH

JUDGEMENT

(1.) PRINCIPAL controversy as to whether the activity of the petitioner, i.e., business of photography, developing and carrying out job work amount to sale resulting in assessing the petitioner of taxable purchase of Rs. 55,00,000/ - during financial year 1.4.2000 to 31.3.2001 by order dated 31.1.2004 and the exigibility of entry tax over purchase of Rs. 10,35,000/ - during the said assessment year and a penalty proceeding under Section 69 in respect of evasion of tax of Rs. 4,80,000/ - was imposed by order dated 25.1.2007, by treating as a sale and not service is no more res integra with the amendment caused in Article 366 of the Constitution of India vide 46th Amendment by incorporating clause 29 A and the decision thereon in Bharat Sanchar Nigam Ltd. and another v. Union of India and others [ : (2006) 3 SCC 1].

(2.) AS evident from the pleadings that on 26.12.2002 search was carried out in the petitioner establishment. The Assessing Officer vide order dated 31.1.2004 found undisclosed sale of Rs. 70,00,000/ - during financial year 1.4.2000 to 31.3.2001 resulting in imposition of Tax of Rs. 4,80,000/ - with a further direction for initiation of separate proceedings under Section 69 of 1994 Act for imposition of penalty. A revision preferred against the order dated 31.1.2004 under Section 62(1) of Madhya Pradesh Commercial Tax Act, 1994 culminating into an order dated 17.9.2004; whereby the matter was remitted to the Assessing Officer for reconsideration after affording an opportunity of hearing to the petitioner. On reconsideration, the petitioner was found liable for tax of Rs. 4,80,000/, on a taxable sale of Rs. 57,93,000/. Revision preferred against the order dated 25.1.2007 was affirmed in revision which was dismissed on 21.3.2008.

(3.) THE decision in Rainbow Colour Lab (supra) relied on by the petitioner was subjected to scrutiny by Three Judges Bench in Associated Cement Companies Ltd. v. Commissioner of Customs [ : (2001) 4 SCC 593]; wherein it was held: