The State of Tamil Nadu vs M/s. New Ambadi Estates Private Limited

Chitra Venkataraman, J.—The above Tax Case Revision is filed at the instance of the Revenue as against the order of the Tamil Nadu Sales Tax Appellate Tribunal for the assessment year 1995-96. The above Tax Case Revision was admitted on the following substantial questions of law:-

Whether the uprooted rubber trees can be classified as timber taxable at 8% or classified as firewood exempted goods under the Third Schedule to the Tamil Nadu General Sales Tax Act, 1959?

Whether in the facts and circumstances of the case, the Tribunal is right in law in coming to the conclusion that uprooted rubber trees is a firewood merely based on the oral argument of the respondent counsel rather than proving the same with the document evidence?

Whether in the facts and circumstance of the case, the Tribunal is right in law in deleting the penalty levied u/s 12(3)(b) of the Tamil Nadu General Sales Tax Act, 1959?"

It is seen from the order of the Tribunal that due to cyclone, rubber trees had fallen and uprooted, this leading to the assessee selling the same as fire wood since fallen trees were not of any use for making furnitures. The assessee claimed exemption under III Schedule to the Tamil Nadu General Sales Tax Act. The Assessing Authority as well as the first Appellate Authority treated the uprooted trees as timber and assessed them as taxable item. Aggrieved by the same, the assessee went on appeal before the Tamil Nadu Sales Tax Appellate Tribunal. The Tribunal pointed out that the rubber trees, stated to have been fallen on account of cyclone, were not of any usage, except as fire wood. Going by this, the Tribunal held that the uprooted trees could not be treated as timber it having lost its utility and could only be used as fire wood. In the circumstances, the Tribunal rejected the contention of the Revenue based on the decision reported in State of Tamil Nadu Vs. Tamil Nadu Stick Industries . Thus, the Tribunal allowed the assessee''s appeal holding that the fallen trees were to be treated as firewood and hence, exempted under the provisions of the Act. Aggrieved by this, the Revenue is on revision before this Court contending that uprooting of the trees caused due to cyclonic effect would not make uprooted tree as fire wood, but the same has to be treated as timber only.

We do not think that the contention of the Revenue could be accepted. On the admitted position that the uprooted trees were old and could not be conditioned again for making any other article of any usage, the finding of the Tribunal that the uprooted tress had become waste one, hence could be used as firewood, we have no hesitation in rejecting the Revenue''s revision, thereby, confirming the order of the Tribunal. In the result, the above Tax Case (Revision) is dismissed. No costs.