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State of Tamil Nadu Vs. Sri Lakshmi Saraswathi Textiles (Arni) P. Ltd. - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtChennai High Court
Decided On
Case NumberTax Case No. 893 of 1976
Judge
Reported in[1978]41STC374(Mad)
AppellantState of Tamil Nadu
RespondentSri Lakshmi Saraswathi Textiles (Arni) P. Ltd.
Advocates:Additional Government Pleader
DispositionPetition dismissed
Excerpt:
- .....was under the central sales tax act, 1956. the respondent herein purchased certain quantity of staple fibre for the purpose of using the same as raw material in its spinning mill. ultimately, it could not use the same as raw material and therefore sold the same as staple fibre. the question for consideration was whether such a sale would be liable to tax under the central sales tax act, 1956. the tribunal found as a fact that thepurchase of staple fibre was purchase as raw material for the existing business of manufacture of yarn and the respondent had no intention whatever of reselling the same. in that context, the tribunal held that the sale of staple fibre by the respondent could not be said to be in the course of the business it carries on, apparently in view of the definition.....
Judgment:

Ismail, J.

1. This is a tax revision petition filed by the State against the order of the Sales Tax Appellate Tribunal dated 16th January, 1975. The matter lies within a very narrow compass. The assessment was under the Central Sales Tax Act, 1956. The respondent herein purchased certain quantity of staple fibre for the purpose of using the same as raw material in its spinning mill. Ultimately, it could not use the same as raw material and therefore sold the same as staple fibre. The question for consideration was whether such a sale would be liable to tax under the Central Sales Tax Act, 1956. The Tribunal found as a fact that thepurchase of staple fibre was purchase as raw material for the existing business of manufacture of yarn and the respondent had no intention whatever of reselling the same. In that context, the Tribunal held that the sale of staple fibre by the respondent could not be said to be in the course of the business it carries on, apparently in view of the definition of the term 'dealer' and the definition of the term 'sale' as contained in Section 2(b) and Section 2(g) of the Central Sales Tax Act, 1956, at the relevant time. We are unable to hold that theTribunal committed any error of law in coming to the conclusion it did. Hence, the tax revision case is dismissed.


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