Bapalal and Co. (Manufacturing), Madras-3 vs The State of Tamil Nadu

Ismail, C.J.—This is a petition to revise the order of the Sales Tax Appellate Tribunal, Madras, dated 25th January, 1978. For the

assessment year 1975-76, the petitioners returned a total and taxable turnover of Rs. 1,08,29,979 and Rs. 1,03,46,238 respectively. The Joint

Commercial Tax Officer included the purchase turnover of old jewels and determined the taxable turnover of Rs. 1,48,04,673 and levied tax on

the purchase turnover at 1 per cent. The Appellate Assistant Commissioner confirmed the assessment. Before the Tribunal, the petitioners

contended that they were purchasing old jewellery and making them into different forms of jewellery and they were not purchasing bullion. The

Tribunal held that in the case of the petitioners, all the requirements of section 7-A(1) of the Tamil Nadu General Sales Tax Act, 1959, have been

satisfied and therefore the petitioners were liable to pay purchase tax. The Tribunal pointed out :

The appellants are dealers in jewellery. They have purchased the goods in the course of their business. The purchases have been made from

customers who are not dealers. The goods purchased, viz., ''bullion'' is liable to single point tax at the point of first sale in the State. No tax is

leviable on the seller u/s 3 or 4 or 5 of the Act. The bullion purchased by the appellants have been melted and (they have) gone into the

manufacture of new jewels. Therefore, the appellants are liable to tax on the purchase turnover of bullion u/s 7-A of the Act and the authorities

have rightly assessed the turnover to tax. The assessment is therefore confirmed.

It is the correctness of this conclusion of the Tribunal that is challenged in the present tax revision case.

From one point of view, the judgment we just now dictated in T.C. No. 152 of 1979 [K. Chennakesavalu v. Commissioner, Board of Revenue

(CT), Madras] 1981 47 STC403 will cover the present case also. That was a case where the dealer purchased old silver jewellery and silver and

made them into fresh silver jewellery and silverware and sold them. We have held that the process involved ""consumption"" of old silver jewellery in

the manufacture of new silver jewellery and silverware and therefore section 7-A(1)(a) is attracted. However, the learned counsel for the

petitioners, who was present when the above judgment was delivered, very vehemently contended that though it may be different article which had

been manufactured, it still continued to be gold jewellery. According to the learned counsel as per the judgment of the Supreme Court in Deputy

Commissioner of Sales Tax (Law), Board of Revenue (Taxes), Ernakulam Vs. Pio Food Packers, , which dealt with section 5A(1)(a) to the

Kerala General Sales Tax Act, 1963, corresponding to section 7-A(1)(a) of the Tamil Nadu General Sales Tax Act, 1959, all the three conditions,

namely, ""consumption"", ""manufacture"" and ""manufacture of the goods"" must be cumulatively satisfied and in this case when the petitioner made new

jewellery, the form alone charged and it still continued to be gold jewellery. We are unable to appreciate this argument. This expression ""gold jewel

or gold jewellery"" is a common term capable of applying to and comprehending within itself every form and every type of gold ornament or jewel.

But the expression used in the section is ""goods"" and certainly the expression ""goods"" will not take in a generic expression like ""gold jewel"" or gold

jewellery"". As a matter of fact, a specific question put by us to the learned counsel was, if the learned counsel is to approach a jewellery shop and

ask for a gold jewel, what exactly is the article or the form of gold jewellery that will be supplied to him ? The only answer the learned counsel

gave was that there will be a further question from the seller as to what form or type of jewellery he wanted and afterwards, he will have to specify

a particular form of jewellery which could be offered by the seller. We are mentioning this merely for the purpose of illustrating the far-fetched

nature of the argument put forward by the learned counsel. Having regard to the use of the language in section 7-A(1)(a) and the ordinary

conception as to what constitutes a gold jewellery, we have no hesitation whatever in agreeing with the Tribunal and dismissing this tax revision

case with costs. Counsel''s fee Rs. 250.

Petition dismissed.