1975 (7) TMI 84 - AT - Income Tax

Summary

Issues:
1. Disputed liability under section 36(1) of the Tamil Nadu General Sales Tax Act for the assessment years 1969-70 and 1970-71.
2. Assessment of taxable turnover based on iron and steel sales and purchase suppression.
3. Disagreement over the wastage loss percentage allowed by the Appellate Authority Commissioner (AAC).
4. Request for the application of a formula to determine the proportion of out-of-state purchases contributing to inter-state sales.
5. Tax payment on inter-state purchases and the applicability of single point tax under the local law.

Analysis:
The judgment pertains to two appeals filed by a partnership firm operating a Steel Rolling Mill challenging the disputed liability under section 36(1) of the Tamil Nadu General Sales Tax Act for the assessment years 1969-70 and 1970-71. The assessing authority estimated taxable turnover based on iron and steel sales, considering purchases of iron scrap outside the State. The Appellate Authority Commissioner (AAC) recomputed the quantity purchased outside the State for 1969-70, resulting in a disputed assessment of Rs. 17,28,000. For 1970-71, the taxable amount was reduced to Rs. 11,74,098.80. The State sought enhancement citing an error in allowing wastage loss at 10%, while the appellant argued for a range of 15 to 20%. The Tribunal upheld the AAC's decision of allowing 10% wastage loss, dismissing the appeals and enhancement petition on this ground.

Regarding the request for applying a formula to determine the proportion of out-of-state purchases contributing to inter-state sales, the Tribunal found the appellant's grounds vague. The authorities had made estimates based on available records, and in the absence of contrary evidence from the appellant, the Tribunal upheld the method used for assessing taxable sales. The appellant failed to provide specific arguments or data to support their claim, leading to the dismissal of the appeal on this point.

Lastly, the appellant contended that having paid tax on inter-state purchases under the Central Sales Tax, they should not be taxed again under the local law. The Tribunal noted the lack of factual basis for this plea and cited legal precedent emphasizing the separate taxation systems of individual states. The appellant's argument for a single point tax on declared goods across the country was deemed untenable, and the Tribunal dismissed the appeals and enhancement petition on this ground as well. Ultimately, both appeals and the enhancement petition were dismissed in their entirety by the Tribunal.