Similar goods manufactured in India and sold by other dealer like Samsung, LG etc. in Tamil Nadu are being taxed at 12% after 27.03.2002. However, the petitioners (assessee) herein alone are now required to pay tax at 20%. Presently, the Act imposes a higher rate of 20% on sales tax whereas other similar goods suffer sales tax at 12% -Liability of sales tax on imported goods transferred to warehouses.
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NOS. 1591-1592 OF 2009
(Arising out of S.L.P.(C) Nos.24422-24423/2007)
M/s Sony India Pvt. Ltd….Appellant(s)
Versus
Commercial Tax Officer & Anr….Respondent(s)
Date of Judgment : New Delhi, March 05, 2009
ORDER
Leave granted.
Appellant had a factory at Dharuhera, Haryana wherein it was manufacturing, inter alia, Televisions, Audio systems, Walkman-Pocket size Radio Cassette Player, which apart from being sold locally, were branch transferred to various States wherein local sales were made. They also imported certain items from abroad either at New Delhi or at Mumbai and after filing Bills of Entry for home consumption, paid customs duty and cleared the goods. The goods were thereafter branch transferred to their warehouses located in different parts of the country including Tamil Nadu. Prior to the period in question, appellant’s products, both indigenously produced as well as those imported from outside India, were assessed under Entry 14(vi) and (viii) of Part D of the First Schedule to the Tamil Nadu General Sales Tax Act, 1959. They were, accordingly, taxed at 12% at the point of first sale in the State of Tamil Nadu. However, in 2002, an amendment was made for the first time and ‘imported’ goods falling in Part D of the First Schedule of the Act were sought to be taxed at enhanced rate of 20%. Appellant sought a clarification from the Commissioner under Section 28-A of the Act. While the clarification was pending, the appellant challenged the said amendment vide O.P.Nos.969-970/2002 before the Tamil Nadu Taxation Special Tribunal constituted under the Tamil Nadu Taxation Special Tribunal Act, 1992 in terms of Article 323B of the Constitution. One of the grounds of challenge was that there was no distinction between imported goods and indigenously manufactured goods particularly when they answer the same description, more so since the goods after import became part of the landmass of India. The appellant also alleged that identical goods manufactured by multinational corporations like LG, Samsung etc. were also subjected to levy of 12% only, since the said multinationals (who were competitors of the appellant) produced those goods in India. The Tribunal dismissed the O.Ps. against which Writ Petitions were filed by the appellant which were also dismissed by the High Court by the impugned judgment, hence these Civil Appeals.
As repeatedly observed by this Court, in tax matters, each word in the Entry requires a factual foundation to be established. In the present case, therefore, we need to look at the subject Entries.
We quote hereinbelow Part-D of the First Schedule to the Act – S. No.14 (vi):
