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2014 (4) TMI 595 - HC - VAT and Sales TaxClassification of Milk – Interpretation of Statute - Held that:- Whether milk is a subject matter of taxation under the First Schedule or under the Third Schedule - Held that:- During the relevant assessment year, 1993-94, milk was very much a subject matter of taxation under the First Schedule - Third Schedule is relevant only in the next assessment year - Therefore, the order of the Tribunal to that extent held incorrect. Exemption Notification - Whether there is any manufacturing process in making the fresh milk as pasteurised milk – Interpretation of Statute - 'Manufacture' – Held that:- Judgment in Aspinwall and Co. Ltd., V. Commissioner of Income Tax [2001 (9) TMI 3 - SUPREME Court] followed – Exemption itemises the subject matter of exemption under Notification - Going by the enumeration in notification, it is clear that they are commercially different commodities - There is no definition what 'manufacture' is - However, Rule 3(h) of the TNGST Rules gives the clue to the understanding of what 'manufacturer' is - It defines, 'manufacturer' - Manufacture' has to be understood as meaning the production of articles for use from raw or prepared materials by giving such materials new forms, qualities or combinations whether by hand labour or machines - Thus, when fresh milk is made as recombined milk or pasteurised milk, there being manufacture, the assessee is entitled to the benefit of Section 3(3) - Tribunal committed an error in holding that there was no manufacturing activity involved when fresh milk was converted as recombined milk/pasteurised milk. Concessional levy of Tax – Penalty - u/s 3(3) & u/s 23 of the TNGST Act, 1959 – Held that:- Section 3(3) grants concessional levy on the sale of packing materials - The benefit of concessional levy is available in respect of purchase of polythene sheets to be used as packing material for sale of pasteurised milk - Order of the Tribunal set aside including the levy of penalty and the Revision is allowed – Decided in favour of assessee.
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