IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 07.07.2011 CORAM: THE HONOURABLE MRS.JUSTICE CHITRA VENKATARAMAN and THE HONOURABLE MR.JUSTICE M.JAICHANDREN Tax Case (Revision) No.854 of 2006 The State of Tamil Nadu represented by The Deputy Commissioner of Commercial Taxes Tiruchirappalli Division Tiruchirappalli. .. Petitioner versus Tvl.Sri Malar Dyeing Works Amaravathi Nagar Andankoil, Karur-2. .. Respondent PRAYER: Tax Case Revision filed under Section 38(1) of the Tamil Nadu General Sales Tax Act, 1959, to revise the order of the Tamil Nadu Sales Tax Appellate Tribunal (Additional Bench), Madurai in M.T.A.No.111/98. against the proceedings of the Appellate Assistant Commissioner (CT) Trichy-1 and made in Appeal No.719/97 by its order dated 27.10.1997. against the assessment order of the Commercial Tax Officer, Karur (West) and made in TNGST 392022/94-95 by its order dated 31.5.1996. For petitioner : Mr.R.Sivaraman Special Govt. Pleader (Taxes) For respondent : Mr.A.Thiagarajan Senior Counsel for Mr.S.Ramesh Kumar https://hcservices.ecourts.gov.in/hcservices/ ORDER (Order of the Court was made by CHITRA VENKATARAMAN,J.) This Tax Case Revision, preferred at the instance of the Revenue, relates to the use of dyeing materials in the course of works contract and the assessability under the provisions of Section 3-B of the Tamil Nadu General Sales Tax Act, 1959. 2. In T.C.Nos.842, 817, 818, 819 to 823, 826, 841, 843, 849, 850, 870, 982, 987, 990, 1036, 1038 and 1040 of 2006, by order dated 1.7.2011 (State of Tamil Nadu Vs. Tvl. Geetha Dyeing, Karur), this Court followed the decision in T.C.No.1661 of 2008 dated 25.8.2010 and allowed a batch of Tax Cases, holding that the turnover was assessable to tax. 3. In T.C.No.1661 of 2008, while considering the decisions reported in [2000] 118 STC 9 (Rainbow Colour Lab and another Vs. State of Madhya Pradesh and others) and [2001] 124 STC 59 (Associated Cement Companies Limited Vs. Commissioner of Customs), this Court held that after introduction of Section 3-B and after the amendment made to the definition of 'sale' under Section 2(n)(ii), the contention raised by the learned counsel for the assessee could not be accepted, since, by operation of law, the transfer of goods involved in the works contract would amount to 'sale' taxable under Section 3-B. Thus the dyes and chemicals used in the execution of works contract would attract levy of tax. The assessee had purchased the dyes and chemicals from outside the State. Consequently, this Court held that entire turnover was cancelled. However, as regards levy of penalty, this Court set aside the levy since there was no suppression of sale in the turnover. 4. Following the said decision, the above tax case revision stands allowed thereby restoring the order of the Assessing Officer. However, it is made clear that as regards levy of penalty, the same shall stand deleted, following the order dated 25.8.2010 made in T.C.No. 1661 of 2008. Sd/- Deputy.Registrar. /true copy/ Sub Asst.Registrar. ksv https://hcservices.ecourts.gov.in/hcservices/ To 1. The Deputy Commissioner of Commercial Taxes Tiruchirappalli Division, Tiruchirappalli. 2. The Appellate Assistant Commissioner (CT), Trichy-1. 3. The Tamil Nadu Sales Tax Appellate Tribunal (Additional Bench), Madurai. 1 cc to Special Government Pleader (Taxes), Sr. 40062 Tax Case (Revision) No.854 of 2006 SP (CO) kk 27/7 https://hcservices.ecourts.gov.in/hcservices/