IN THE HIGH COURT OF JUDICATURE AT MADRAS Dated : 30.09.2008 Coram :- THE HONOURABLE MR.JUSTICE K.RAVIRAJA PANDIAN and THE HONOURABLE MR.JUSTICE P.P.S.JANARTHANA RAJA Tax Case (Revision) 650 of 2006 M/s Vasim Tanning Company No.256-A, Pudukottai Road Sembattu, Tiruchirappalli 7 Petitioner v. The State of Tamil Nadu represented by the Deputy Commercial Tax Officer Tiruverumbur Assessment Circle Trichy Respondent Tax Case Revision filed under section 38 of the Tamil Nadu General Sales Tax Act, 1959, to revise the order of the Tamil Nadu Sales Tax Appellate Tribunal (Addl. Bench) Madurai passed in MTA No.718/2001 dated 18.10.2002. preferred against the order of the Appellate Assistant Commissioner (CT) Trichy, dated 25.1.2001 in Appeal No's 572/2000, 339/2000 for assessm.3ent year of TNGST 1996-97. For Petitioner : Mrs.R.Hemalatha JUDGMENT (Judgment of the Court was delivered by K.RAVIRAJA PANDIAN, J.) This tax case revision is transferred from the Special Tribunal after its abolition as per Section 3 of the Special Tribunal Repealing Act. 2. This Court, originally directed the Registry to issue notice to the respondent so as to make submission as to the jurisdiction of this Court to try the case. The original order of assessment as well as the appellate order which culminated in the order of the Appellate Tribunal are all within the jurisdiction of https://hcservices.ecourts.gov.in/hcservices/ the Madurai Bench of Madras High Court. As against the order passed by the Appellate Tribunal, Madurai, the assessee carried the matter by way of revision to the Special Tribunal constituted under Article 323B of the Constitution of India. The revision was filed invoking the power under section 38 of the Tamil Nadu General Sales Tax Act. The Special Tribunal admitted the revision on 18.11.2003. As said earlier, on abolition of the Tribunal, the revision was transferred to the Principal Bench of the Madras High Court under section 3 of the Repealing Act. 3. The Supreme Court in Rajasthan High Court Advocates' Association vs. Union of India and Others reported in (2001) 2 Supreme Court Cases 294 in paragraph 15 has held as follows by referring Nasiruddin's case:- "15. The expression similar to the one "in respect of cases arising in the districts of" as used in para 2 of the Presidential Order came up for the consideration of a four- Judge Bench of this Court in Nasiruddin vs STAT. It was in the context of division of territorial jurisdiction between Allahabad and Lucknow Benches in Uttar Pradesh. This Court held: (SCC pp.683-84, paras 37-39) "[T]he expression 'cause of action' in an application under Article 226 would be as the expression is understood and if the cause of action arose because of the appellate order or the revisional order which came to be passed at Lucknow then Lucknow would have jurisdiction though the original order passed at a place outside the areas in Oudh. It may be that the original order was in favour of the person applying for a writ. In such case, an adverse appellate order might be the cause of action. The expression 'cause of action' is well known. If the cause of action arises wholly or in part at a place within the specified Oudh areas, the Lucknow Bench will have jurisdiction. If the cause of action arises wholly within the specified Oudh areas, it is indisputable that the Lucknow Bench would have exclusive jurisdiction in such a matter. If the cause of action arises in part within the specified areas in Oudh it would be open to the litigant who is the dominus litis to have his forum conveniens. The litigant has the right to go to a court where part of his cause of action arises. In such cases, it is https://hcservices.ecourts.gov.in/hcservices/ incorrect to say that the litigant chooses any particular court. The choice is by reason of the jurisdiction of the court being attracted by part of cause of action arising within the jurisdiction of the Court. Similarly, if the cause of action can be said to have arisen partly within specified areas in Oudh and partly outside the specified Oudh areas, the litigant will have the choice to institute proceedings either at Allahabad or Lucknow. The court will find out in each case whether the jurisdiction of the court is rightly attracted by the alleged cause of action. [The expression 'cause of action' with regard to a civil matter means that it should be left to the litigant to institute cases at Lucknow Bench or at Allahabad Bench according to the cause of action arising wholly or in part within either of the areas. If the cause of action arises wholly within Oudh areas then the Lucknow Bench will have jurisdiction. Similarly, if the cause of action arises wholly outside the specified areas in Oudh then Allahabad will have jurisdiction. If the cause of action in part arises in the specified Oudh areas and part of the cause of action arises outside the specified areas, it will be open to the litigant to frame the case appropriately to attract the jurisdiction either at Lucknow or at Allahabad. Applications under Article 226 will similarly lie either at Lucknow or at Allahabad as the applicant will allege that the whole of cause of action or part of the cause of action arose at Lucknow within the specified areas of Oudh or part of the cause of action arose at a place outside the specified Oudh areas". 4. In the given set of facts, the revision has been entertained and admitted by the Special Tribunal as early as on 18.11.2003. During that period, the Special Tribunal has exercised the supplementary role of the High Court in disposing of the statutory appeal and revision. On admission of the revision, the order questioned therein entered into the arena and the entire order was wide open for scrutiny by the Special Tribunal and the order of the Tribunal and its enforcement became jeoparadized. https://hcservices.ecourts.gov.in/hcservices/ 5. Learned Counsel representing the revenue as well as the assessee also accepted the position of law and the assessee being a dominus litus elected this Court for the purpose of determination of the issue. Thus, this Court has jurisdiction to proceed further with the transferred case. 6. Now coming to the point, the assessee is a tanner and was assessed by the Deputy Commercial Tax Officer, Tiruvarambur, Trichy for the assessment year 1996-97 under the TNGST Act, 1959, on a total and taxable turnover of Rs.17,09,905/- and Rs.16,31,899/- against the reported total and taxable turnover of Rs.16,16,824/- and Rs.13,75,752/- respectively. The assessee has claimed exemption on a turnover of Rs.64,636/- on the last purchase of Wattle Extract from TALCO. However, the assessing officer has rejected the same. Aggrieved by the order passed by the Assessing Officer, the assessee preferred an appeal before the Appellate Assistant Commissioner of Commercial Taxes, Trichy. The Appellate Assistant Commissioner confirmed the order of the Assessing Officer except some relief granted with regard to the levy of penalty. Aggrieved by the order of the First Appellate Authority, the assessee preferred Second Appeal before the Sales Tax Appellate Tribunal (Additional Bench), which by reason of the impugned order dismissed the same. The correctness of the same is now putforth before us by way of revision. 7. The one and only question of law involved in this revision is whether the Tribunal was right in confirming the order of the Assessing Officer, who treated the purchase of Wattle Extract from Tamil Nadu Leather Development Corporation Limited as the last purchase without referring to the clarification of the Secretary to Government by his clarification dated 06.12.1988. 8. The above said issue has been considered by the Special Tribunal, which has decided against the assessee in the case of All India Skins and Hides Tanners and Merchants Association and Others vs. Commercial Tax Officer, Periamet Assessment Circle and Others reported in 115 STC 388. The correctness of the said order has been put in issue before this Court by the said assessee and this Court in the above said case reported in 127 STC 491 has held as follows:- "The provisions of the Tamil Nadu Societies Registration Act, 1975 nowhere provide that the society when registered shall be an incorporated body. The society is required to have a committee and action is to be brought by a person authorised under the bye- laws. While the fact of being registered confers certain rights on the society, such registration does not, ipso facto, result in its being incorporated. The fact of being registered under the Societies https://hcservices.ecourts.gov.in/hcservices/ Registration Act, whether under the Central Act or the State Act, does not necessarily result in the society becoming incorporated. The law, before as well as after the 46th Constitution Amendment with regard to the taxability of goods sold for valuable consideration by an incorporated body to its members is that such sales are taxable. It has never been the law that an incorporated body cannot be subjected to sales tax when it sells goods to its members. A shareholder or member of a company or other incorporated entity can be as much a buyer as any third party can be, when goods are purchased from the incorporated body, Commercial activities in any country are now carried on to a substantial extent by incorporated bodies. Sales by incorporated bodies to their members, are sales which are exigible to tax". 9. The Division Bench further held that the petitioner, being an incorporated body, it clearly fell within the expression "unincorporated association" referred to in sub-clause (e) of article 366(29A) of the Constitution. Section 2(n)(v) of the Tamil Nadu General Sales Tax act, 1959, treats the supply of goods by an unincorporated association, to its members for cash, deferred payment, or other valuable consideration, as a sale. The provisions for levy of tax on the supplies effected as in this case, were clearly to be found in section 2(n)(v) of the Tamil Nadu General Sales Tax Act, which was in conformity with article 366(29A)(e) of the Constitution and thereby confirmed the order of the Special Tribunal made in the above referred case reported in 115 STC 388. Thus the issue is squarely covered by the decision reported in 127 STC 491. 10. As the issue is covered by the Division Bench Judgment referred supra, following the same, this revision is dismissed. Sd/ Asst.Registrar /true copy/ Sub Asst.Registrar rg/mf https://hcservices.ecourts.gov.in/hcservices/ To 1. The Deputy Commercial Tax Officer Tiruverumbur Assessment Circle Trichy. 2. The Appellate Assistant Commissioner (CT) Trichy. 3. The Deputy Commissioner (CT) Trichy 4. The Special Commissioner and Commissioner of Commericial Tax, Chepauk, Chennai- 5 5. The Tamilnadu Sales Tax Appellate Tribunal (Addl.Bench) Madurai 6. The Tamilnadu Taxation Special Tribunal Chennai 1 cc To M/s.Mrs.R.Hemalatha, Advocate, SR.56334/08 1 cc To The Special Government Pleader(Taxes),High Court, Madras - 104, SR.56445/08 TC (R) 650 of 2006 TM [CO] RB 20/10/2008 https://hcservices.ecourts.gov.in/hcservices/