Vardhaman Trade Links vs Tamil Nadu Taxation Special Tribunal and Others

K. Raviraja Pandian, J.—This writ petition has been filed against the order dated February 16, 2004 made in O.P. No. 440 of 2003. The petitioner is a registered dealer under the Tamil Nadu General Sales Tax Act, 1959 and doing business of importing and trading textile fabrics, which are coated and known commercially as man-made textiles, PVC coated fabric and flocking fabric PVC coated. The said goods are classified for the purpose of payment of duty on such imports as textiles under entry 59.03 of the customs tariff falling under the heading textiles fabrics impregnated and coating covered or laminated with plastics other than those of heading 59.02. The relevant entry 59.03 reads as follows:

59.03 Textile fabrics, impregnated, coated, covered or laminated with plastics, other than those of heading No.59.02.

It is the case of the petitioner that the petitioner paid the customs duty as provided under the relevant customs tariff applicable at the time of import and in addition thereto, countervailing duty has also been paid. The goods were also subjected to special additional duty u/s 3A of the Customs Tariff Act, 1975. As the goods were subjected to sales tax on the first sale within the State of Tamil Nadu under SI. No. 9 of the Eleventh Schedule to the Tamil Nadu General Sales Tax Act at 20 per cent, the petitioner filed the original petition before the Special Tribunal. The Special Tribunal has declared the entry as ultra vires to Sections 14 and 15 of the Central Sales Tax Act, 1956 but held that the liability of tax as declared goods at the maximum rate of four per cent has to be paid. That order is now canvassed before us as illegal on the sole ground that, as the petitioner had paid in addition to customs duty, countervailing duty and special additional duty u/s 3A of the Customs Tariff Act, the State Government is not vested with any power from levying tax even at four per cent.

Heard the learned Counsel for the petitioner and also the learned Special Government Pleader appearing for the respondents.

The point in issue itself is no longer res integra, which has been considered by a Division Bench of this Court in Nemichand Parasmal and Co. v. Deputy Commercial Tax Officer reported in [1984] 55 STC 47, wherein it was held that the Additional Duties of Excise (Goods of Special Importance) Act, 1957, instead of taking away the powers of the State Legislature to impose sales tax on the items of goods covered by the Act, merely disables the State Government from getting its share of the Central excise revenue realised under the provisions of the Act. Therefore, the provisions of the Act do not affect the power of the State to levy sales tax on the goods, which are covered by the Act. The said Division Bench judgment has been approved by the Supreme Court in State of Bihar v. Bihar Chamber of Commerce reported in [1996] 103 STC 1. Hence, the competence cannot be now put in issue, as the law has been declared by the Supreme Court. Useful reference can also be made to the Division Bench judgment of this Court in Indian Sugar & General Industry Export Import Corporation Ltd. v. Commercial Tax Officer reported in [2002] 127 STC 339, wherein on identical set of facts, the goods referred to therein, which has been imported by the petitioner and subjected to import duty, countervailing duty and the duty u/s 3A of the Customs Tariff Act has been considered by this Court for the purpose of levy of tax under the State enactment and this Court following the decision of Govind Saran Ganga Saran Vs. Commissioner of Sales Tax and Others, , wherein it has been held that the sugar to be a declared goods u/s 14 of the Central Sales Tax Act and in view of the protection given under Article 286 of the Constitution of India cannot more than four per cent. The court further held that the sugar falling within the scope of subheadings of the Central Excise Tariff Act and referred to in item (iii) of Section 14 of the Central Sales Tax Act, 1956 would be declared goods, irrespective of the place of their manufacture.

The test is not where the goods were manufactured, but whether the goods answer the description in the sub-headings. If the description fits in, such goods become "declared goods". The observation made by the Division Bench in respect of sugar is equally applicable in respect of the goods textile, which is the subject-matter of the present case and as such it can only be considered as declared goods and can be taxed only at the maximum rate of four per cent as provided u/s 15 of the Central Sales Tax Act.

In view of the foregoing reasoning, we find no reason to interfere with the finding arrived at by the Special Tribunal.

Hence, the writ petition is dismissed. Consequently, connected W.P.M.P. is also dismissed.

No costs.