The Hindu Business Line : HC ruling on ST waiver for lotteries, printed materials

Printed materials and printing of lotteries would not amount to ‘sale’ according to the Tamil Nadu Government’s GO Ms No 976 Revenue dated March 28, 1959, and hence, they were eligible for tax exemption. Even a printer of reading books was entitled to the relief, ruled the Madurai Bench of the Madras High Court.

Allowing a writ petition from Orient Litho Press, Sivakasi, challenged a notice dated April 28, 1992 of the Joint Commissioner (CT)-III (SMR), Chennai, to show cause as to why these items should not be included for tax assessment for year 1984-85. Mr Justice K. Chandru said that according to the definition of ‘sale’ in Section 2(g) of Central Sales Tax Act that came to be amended with effect from May 11, 2002, even a works contract could be treated as a sale. But in the case of the petitioner, the transactions took place before the amendment, and hence they would be eligible for tax exemption.

Works contract

The moment the revisional authority came to the conclusion that it was a works contract, no liability for tax arose as the transaction related prior to May 11, 2002. Also, the question of remanding the issue to the assessing authority for fresh consideration might not arise since it was a pre-amended transaction.

The order of the Joint Commissioner of Commercial Tax, Chennai (R-2), setting aside the order of the Appellate Assistant Commissioner stating that printed materials and printing of lotteries would not amount to sale, was “self-contradictory”, the Judge ruled. It was not explained as to why the revenue had not appealed against the appellate order. On the contrary, the order had become final in 2000, and it was only by the suo motu revisional power, the subject was sought to be reopened.

The Judge held that the order of the remand by R-2 did not stand scrutiny of law, and it was without jurisdiction. Having found the two transactions of petitioner would amount to a works contract, there was no question of any further remand, as the transactions were admittedly made before May 11, 2002 and the amendment had not come into force.

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