State of Tamil Nadu vs Tata Oil Mills Co. Ltd.

Dr. A.S. Anand, C.J.—These two tax revision cases have been filed by the Revenue against the same assessee and pertain to the

assessment years 1977-78 and 1978-79.

Before the appellate authority the assessee had raised two points : (1) that the prawns which had been cleaned, frozen and packed for export

could not be regarded as a different kind of commercial commodity from prawns got fresh from the sea and purchased from the local fishermen,

and therefore, the exemption u/s 5(3) of the Central Sales Tax Act, 1956, read with proviso to section 9 of the Tamil Nadu General Sales Tax

Act, 1959 was available to the assessee; and (2) that during the course of cleaning and packing for export, etc., of prawns some marginal loss was

bound to occur due to wastage while packing the same for export and the assessing authority was not justified in treating the wastage as

unaccounted and subjecting it to levy of tax.

The appellate authority accepted the submission on the first point and following its earlier order in the case of the same assessee in T.A. No.

883 of 1980 dated 20th of May, 1981, for the assessment year 1976-77 against which the tax case filed by the Revenue being T.C. No. 1261 of

1981 was also dismissed by a Bench of this Court on 7th December, 1982, granted the benefit of exemption u/s 5(3) of the Central Sales Tax Act

to the assessee. So far as the addition towards unaccounted loss is concerned, the appellate authority held against the assessee against which the

assessee went in appeal before the Tamil Nadu Sales Tax Appellate Tribunal, Main Bench, Madras. The Tribunal noticed that for the assessment

year 1977-78 the unaccounted loss claimed was to the tune of 531 kilograms of prawns out of the total purchase of 1,37,244 kilograms while for

the assessment year 1978-79 the unaccounted loss was 1,818 kilograms. The Tribunal noticed that some marginal loss was bound to occur due to

wastage while packing and that the loss claimed by the assessee in the instant case was neither very excessive nor unreasonably high. The Tribunal

therefore deleted the additions of Rs. 1,23,951 for the assessment year 1977-78 and Rs. 1,23,775 for the assessment year 1978-79. The opinion

of the Tribunal that while cleaning, cutting and freezing as also packing, some marginal loss was bound to occur is both logical and reasonable. The

court cannot ignore the fact that such loss is bound to occur while packing a commodity like prawns after cleaning, etc. Considering the total

turnover of the assessee for the years 1977-78 and 1978-79 the loss of Rs. 1,23,951 and Rs. 1,23,775 respectively is only marginal and the

Tribunal rightly granted the benefit to the assessee in respect of those additions.

It is relevant to mention that the Revenue had not filed any enhancement petitions within the prescribed time before the Tribunal against the

finding of the appellate authority relating to the grant of exemption u/s 5(3) of the Central Sales Tax Act. The enhancement petitions were filed

much later and for cogent reasons given by the Tribunal, the same were not entertained. Even otherwise, the enhancement petitions, in view of the

law laid down by this Court in T.C. No. 1261 of 1981 (State of Tamil Nadu v. Tata Oil Mills Co. Ltd.) dated 7th December, 1982, were bound

to fail.

Thus, in view of the aforesaid discussion and the judgment rendered by a Bench of this Court in T.C. No. 1261 of 1981 dated 7th of

December, 1982, these revision petitions have no merit. They fail and are dismissed. There shall be no order as to costs.

Petitions dismissed.