At, High Court of Judicature at Madras
By, THE HONOURABLE CHIEF JUSTICE MR. K.A. SWAMI & THE HONOURABLE MR. JUSTICE SOMASUNDARAM
R. Venkataraman, Mrs. Chitra Venkataraman, Advocates.
K.A. SWAMI, C.J.
This appeal is preferred against the order dated January 5, 1993, passed by the Joint Commissioner (SMR) of Commercial Taxes, Madras, in Ref. No. T2/2444/92 under section37 of the Tamil Nadu General Sales Tax Act, 1959, hereinafter referred to as "the Act".
2. The contention of the appellant/assessee is that there is no finding recorded by any of the authorities below that the appellant purchased the motor and grinder separately and assembled them into one as wet grinder, even though it is the case of the assessee that he is not selling any wet grinder and is selling only the electric motor and the grinder separately; therefore, the tax assessed on the basis of the entry No. 41-E of the First Schedule to the Act is not permissible in law. It is not possible to accept this contention in the light of the finding recorded in paragraph 12 of the order of the Joint Commissioner (SMR) which reads thus :
"On facts, it is found with reference to the list furnished before me that the goods were sold only to consumers in single bill. Even in common parlance or trade practice, no consumer will take the grinder and motor separately, but he would normally satisfy himself by a test run and then only get them door-delivered. If the abovesaid facts are taken into consideration, the contention of the assessee that they had sold wet grinders and motors separately are not acceptable. On the other hand, from the list of purchases filed by the assessee it would be further evident that the assessee had purchased wet grinders fitted with motors as such from earlier registered dealers for a sum of Rs. 32, 045.20. The assessee had a gross profit of 9.62 per cent. Applying this, the sales turnover of the assessee would be arrived at Rs. 35, 137.81 which represented second sales at the hands of the assessee. Giving deduction on this amount, the assessee becomes liable for taxation at 12 per cent on the remaining turnover of Rs. 33, 156. Therefore as against a sum of Rs. 1, 10, 050 adopted by the assessing authority in the revision of assessment, a sum of Rs. 33, 156 will be restored for assessment taxable at 12 per cent."
Of course, if it had been proved by the assessee that he was purchasing the electric motors and grinders separately and selling them separately, such sale would have become a second sale and would not have become liable for sales tax. In fact, it has been found by the Joint Commissioner that certain transactions of the assessee did relate to purchase of the wet grinder fitted with electric motor and sale of the same, and such turnover was to the tune of Rs. 32, 045.20 and that turnover has been deducted out of the taxable turnover of the assessee.
3. Learned counsel for the appellant placed reliance on a Division Bench decision of this Court in State of Tamil Nadu v. Suguna Agencies. It may be pointed out that in that very case, it has been specifically stated that the said decision should not be taken to mean that, in cases where materials become available to show that such a combination of electrical motor and grinder created a new commodity altogether, such commodity should not be taxed when sold by a person creating the commodity and seeking exemption. As in the instant case of the assessee that he was purchasing the electric motor and grinder separately and selling them separately, has been rejected and what has been found is that after purchasing the electric motor and grinder separately, the assessee assembled them into one unit and sold it as an electrical wet grinder, thereby falling under entry No. 41-E of the First Sche
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dule to the Act which reads thus : "Wet grain grinders designed for use with electricity or other form of power (whether or not sold as a composite unit, with or without motors) and the parts and accessories of such grinders". Therefore, we are of the view that the order of the Joint Commissioner does not call for interference. The appeal is, accordingly, rejected. No costs.