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The Deputy Commissioner of Commercial Taxes, Tiruchirapalli Division Vs. P. Gnanambal - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtChennai High Court
Decided On
Case Number Tax Case No. 305 of 1979 (Revision No. 113 of 1979)
Judge
Reported in[1980]46STC302(Mad)
AppellantThe Deputy Commissioner of Commercial Taxes, Tiruchirapalli Division
RespondentP. Gnanambal
Appellant Advocate The Government Pleader
Respondent Advocate R. Gangadharan, Adv.
DispositionPetition allowed
Excerpt:
- .....23rd june, 1978, in tribunal appeal no. 1223 of 1977. the respondent herein is a dealer in country chekku products at bhuvanagiri in south arcot district. during the assessment year 1975-76, it was found that the respondent had purchased gingelly seeds for the value of rs. 18,507, which the respondent had obviously used for manufacturing oil and also getting the resultant oilcake. the purchase turnover of rs. 18,507 was taxed under section 7-a of the tamil nadu general sales tax act, 1959. the respondent contended that she was a dealer in oil chekku products and hence exempted even from the tax on the purchase of gingelly seeds. this contention was not accepted by the authorities below. but the tribunal, on a theory of public welfare intended to help a class of under-privileged and.....
Judgment:

M.M. Ismail, C.J.

1. This revision petition is directed against the order of the Tamil Nadu Sales Tax Appellate Tribunal, Madras (Second Additional Bench), dated 23rd June, 1978, in Tribunal Appeal No. 1223 of 1977. The respondent herein is a dealer in country chekku products at Bhuvanagiri in South Arcot District. During the assessment year 1975-76, it was found that the respondent had purchased gingelly seeds for the value of Rs. 18,507, which the respondent had obviously used for manufacturing oil and also getting the resultant oilcake. The purchase turnover of Rs. 18,507 was taxed under Section 7-A of the Tamil Nadu General Sales Tax Act, 1959. The respondent contended that she was a dealer in oil chekku products and hence exempted even from the tax On the purchase of gingelly seeds. This contention was not accepted by the authorities below. But the Tribunal, on a theory of public welfare intended to help a class of under-privileged and economically backward section of the society, held that the respondent was entitled to the exemption in respect of this purchase also. It is the correctness of this order of the Tribunal that is questioned in this tax revision case.

2. There is no dispute about the fact that Section 7-A of the Act applies to the purchase of gingelly seeds. However, under G. O. Ms. No. 976, Revenue, dated 28th March, 1959, the sales of products of country oil chekku by every person owning or having interest in country oil chekku, single or multiple, and dealing exclusively in the produce of such chekkus had been exempted from taxation under the Act, provided that the total turnover for a year did not exceed Rs. 25,000. However, under G. O. Ms. No. 1963, Revenue, dated 21st April, 1960, the sales of products of country oil chekku by every person owning or having interest in country oil chekku, single or multiple, and dealing exclusively in such products of such chekku, were exempted from tax from 1st April, 1960. There is yet another Government Order to which reference has to be made, namely, G. O. Ms. No. 5404, Revenue, dated 30th December, 1960, read with G. O. Ps. No. 4593, Revenue, dated 14th December, 1962, under which even the purchases of groundnut kernel used for producing oil by persons dealing exclusively in the products of such chekku were exempted from tax from 1st October, 1960. Admittedly there is no Government Order passed under Section 17 of the Act exempting the purchase turnover of gingelly seeds by the owners of country oil chekku from liability to tax. What was argued before the Tribunal and which found favour with the Tribunal was that the spirit of the Government Order referred to above must be applied to the purchase turnover of gingelly seeds as well. The Tribunal itself states in its order :

But when G. 0. Press No. 1963, Revenue, dated 21st April, 1960, was passed under Section 17 of the Tamil Nadu General Sales Tax Act, 1959, the predominant intention was to help small-scale artisans like the assessee to be exempted from the rigour of sales tax under the Act, so as to enable them to compete with the operators using expellers and rotary for extracting oil. At the time when G. 0. No. 1963, Revenue, dated 21st April, 1960, came into existence Section 7-A did not come into force, as the latter section was introduced to come into force on 27th November, 1969. But the predominant intention being to help a class of under-privileged and economically backward section of society as country chekku oil owners, it is the basic theory of public welfare embodied in the G. 0. that should govern even in cases like the instant case assessee in respect of their purchases and not a mere technicality, that purchases by such persons are not exempted under any special G. 0. Therefore, we are of the view that G. O. No. 1963, Revenue, dated 21st April, 1960, applies as much to purchases as for sales made by the country chekku oil owners and therefore we are of the view that the purchase tax cannot be levied on the assessee in respect of the disputed turnover.

3. We are clearly of the opinion that the above reasoning of the Tribunal is erroneous. It is no part of the duty of the Tribunal to go into any basic theory of public welfare or to find out what the intention behind the order issued by the Government was, nor to extend the scope of the Government Order to any other matters, which are not expressly governed by the language of the Government Order. If any such indulgence is to be resorted to by a statutory body like the Tribunal, the ultimate result will be one of arbitrariness depending upon the whims and fancies of the Tribunal or the economic predilections of the Tribunal, for which there can be no scope in the scheme of our legal system. Under these circumstances, we have no hesitation whatever in holding that the Tribunal went beyond the scope of its powers and, as a matter of fact, unreasonably and unwarrantedly extended the applicability of the Government Order in question to a case to which the terms of the Government Order, neither expressly nor by implication, applied. Hence the tax revision case is allowed and the order of the Tribunal is set aside. There will be no order as to costs.


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