Standard Press (India) (Pvt) Ltd Vs State of Tamil Nadu (Madras High Court)
The Madras High Court set aside an ex-parte order passed by the Tamil Nadu Sales Tax Appellate Tribunal against Standard Press (India) (Pvt) Ltd., a registered dealer engaged in printing works. The dispute centers on whether a dealer who opts for compounded tax payment under Section 3-G of the Tamil Nadu General Sales Tax (TNGST) Act, 1959, can still claim exemption on the sale of specific items, such as children’s educational books and printed car manuals, which are otherwise exempt under other statutory provisions and notifications. The High Court found a clear violation of the principles of natural justice and remitted the matter back to the Tribunal for a decision on merits.
Origin of the Tax Dispute
The case pertains to the Assessment Year (A.Y.) 2004-2005. Initially, Standard Press was assessed on a total turnover, but the Assessing Officer (AO) later reopened the assessment under Section 16 of the TNGST Act. The reopening was initiated to disallow two key claims of exemption:
- Sale of children’s educational books (exempt under the Third Schedule and Section 8 of the TNGST Act).
- Sale of printed car manuals supplied to M/s. Hyundai Motors, classified as consumables (exempt via G.O.Ms.No.16 CT & RE, dated 12.01.1998 under Section 17 of the Act).
The AO, relying on the fact that the petitioner had opted for the compounded tax scheme under Section 3-G of the TNGST Act, disallowed these exemptions. The AO also levied 1% tax under Section 3(4) on pre-export and direct export sales.
