Parvathi Cashew Industries vs The State of Tamil Nadu

F.M. Ibrahim Kalifulla, J.—This tax case revision has been preferred by the assessee, which pertains to the assessment year 1990-91 under

the TNGST Act. The assessee is stated to have purchased cashew nuts from one M/s. Century Cashew Products. The Assessing Authority held

that the said purchase made by the petitioner was imported nuts from foreign countries by the seller viz., M/s. Century Cashew Products, which

attracted levy of tax at the rate of 5% single point. The total purchase value of Rs. 11,67,290/- was therefore assessed to tax in a sum of Rs.

90,206/-. The Appellate Assistant Commissioner however held that the purchase of cashew nuts by the petitioner was not imported one by the

seller viz., M/s. Century Cashew Products, but the same were procured by it from the local party. The Appellate Assistant Commissioner

therefore set aside the order of the assessment. The Tribunal in the order impugned in this revision, by relying upon the reply made by the petitioner

to the pre-assessment notice, held that the order of the Assessing Officer cannot be interfered with.

There are two relevant factors, which are required to be considered in this revision, viz., (i) the statements contained in the petitioner''s reply to

the pre-assessment notice and (ii) the various invoices covering the purchase of cashew nuts made by the petitioner from viz., M/s. Century

Cashew Products. It is true that in the reply to the pre-assessment notice, the petitioner made a statement that it purchased raw cashew from viz.,

M/s. Century Cashew Products from out of the imports made by them. It further contains a statement that it had paid purchase tax at the rate of

5% u/s 9(a) of the TNGST Act read with Section 5(2) of the CST Act. However, in the invoices produced by the petitioner numbering 7, which

covers the entire purchase of cashew made by the petitioner from M/s. Century Cashew Products, it is specifically mentioned that such cashew

nuts were local raw cashew nuts of Rajamundry. In the said invoices, the TNGST at the rate of 5% along with surcharge and cess have also been

specified, which is stated to have been collected from the petitioner. One other factor, which is not in dispute is that M/s. Century Cashew

Products is a concern, which deals not only with the imported cashew nuts, but also the sale of cashew nuts procured from the local market. In the

pre-revision notice, there is a specific reference to 7 invoices produced by the petitioner at the time of original assessment.

In the above said background, the question that arises for consideration is as to when there is a specific reference made in various invoices

stating that the cashews sold were procured from the local market viz., Rajamundry and that such sale also suffered a tax at the rate of 5% under

the TNGST Act, apart from surcharge and cess, the petitioner would still be liable for payment of tax once over again under the Act. In fact, in the

order of assessment, the Assessing Authority has proceeded to levy the tax by relying on the admission made by the petitioner in its reply to the

pre-revision notice to the effect that cashew nuts were purchased by it from M/s. Century Cashew Products were from out of the imports made by

them. The Tribunal has also solely relied upon the said version of the petitioner. As against the said version, when specific bills viz., the invoices

raised by the seller viz., M/s. Century Cashew Products, were placed by the petitioner before the Assessing Authority, which mentions a different

picture altogether with reference to the payment of tax and origin of purchase, it is appropriate that the original Assessing Authority while seeking

to revise the original order, apply his mind with reference to the documents placed by the petitioner before it, vis-a-vis the statements contained in

his reply, before fastening any liability of tax on the petitioner. Such an exercise would enable the Assessing Authority to verify as to whether or not

the purchases made by the petitioner already suffered tax at the hands of the seller either by virtue of the local purchase made by them or by virtue

of the tax collected from the petitioner at the time of its sale to the petitioner. Inasmuch as such issues relate to very many minute details of facts,

we deem it appropriate to direct the Assessing Authority to carry out the said exercise in the interest of justice. Therefore, while setting aside the

order impugned in this revision as well as the order of the Assessing Authority, we direct the Assessing Authority to hold an enquiry afresh by

giving an opportunity to the petitioner, examine the factual position in detail and pass orders in accordance with law. Consequently, tax case

revision is allowed. No costs.