State of Tamilnadu Vs Tvl. Aruppukottai Taluk (Madras High Court)
The State filed the appeal challenging the order of the Tribunal, which had allowed the assessee’s appeal and granted relief in respect of the sales turnover relating to the distribution of art silk yarn to the members of a Co-operative Society.
The Commercial Tax Officer, Aruppukottai, in the original assessment orders for the assessment years 1995-96, 1996-97, 1997-98 and 1998-99, revoked the exemption claimed by the assessee in respect of the value of art silk yarn distributed to its members on receipt of monetary consideration and assessed tax along with penalty. The assessee appealed before the Appellate Assistant Commissioner (CT), who deleted the penalty but confirmed the assessment on the disputed turnover. The assessee thereafter preferred a further appeal before the Tribunal.
The Tribunal held that the disputed turnover satisfied all the conditions specified in Explanation 2(iv) to Section 2(r) of the Tamil Nadu General Sales Tax Act, 1959, read with Rule 5-A(c) of the Tamil Nadu General Sales Tax Rules, 1959, and therefore the disputed transaction did not form part of the taxable turnover. Consequently, the Tribunal granted complete relief from payment of tax on the transactions involving distribution of art silk yarn by the assessee to its members.
