Sales Tax Decisions

P. C. Joshi, Advocate

1. Additional evidence

The Allahabad High Court held that the Tribunal did not have power to accept additional evidence produced for the first time before it, contrary to the provisions of section 12B of U.P. Trade Tax Act, 1948.

Commissioner of Trade Tax vs. Faquir Ram Sita Ram Rolling Mills 2011 NTN (Vol. 47)-1.

2. Circular

(a) Refusal to follow

The Karnataka High Court held that the assessing officer was not justified in passing the order by refusing to accept the revised return filed by the Petitioner after the prescribed period of six months. Such an action was held to be a case of defiance of Commissioner’s circular dated 7th July, 2008 in which the directions were issued to accept the revised returns even when filed beyond the period of six months provided in the ACT.

Federal Mogul Goetze (India) Ltd. vs. Asst. Commissioner of Commercial Taxes (Audit) & Ors. (2011) 19 STJ 292 (Kar).

(b) Power of Commissioner of Sales Tax

The Bombay High Court held that the provisions of section 10(10) of the Maharashtra Value Added Tax Act, 2002 empowered the Commissioner to issue instructions and directions to his subordinate officers for carrying out the purposes of the Act, but such a power cannot be exercised through a trade circular in regard to the matters (like interpretation of Entries) required to be determined in quasi-judicial proceedings by the competent authorities. In the instant case, the Commissioner had withdrawn the earlier two circulars issued by the then Commissioner in regard to the scope of entry C-70 in respect of paper, newsprint, etc., under the said Act, while submission of the Petitioner was that the item ‘wallpaper’ continued to be covered by the said entry.

Marshalls Enterprise India Pvt. Ltd. vs. The State of Maharashtra & Anr. Writ Petition No. 1463 of 2011 decided on 22nd Sept., 2011

(c) (i) in conflict with the provisions

(ii) input tax credit

The High Court of Uttarakhand held that section 76(6)(c) of the Uttaranchal Value Added Tax Act, 2005 did not restrict the quantum of input tax credit only to the extent of the amount actually paid in the Government treasury by the seller. In other words, the purchasing dealer was eligible to claim ITC even when the amount was adjusted or set off against the amount receivable from the Government in the hands of the seller to whom the purchasing dealer may have paid the tax. The High Court so holding declared, the circular dated 17th April, 2008 by the Commissioner of Commercial Taxes, to be in conflict with the provisions of section 76(6)(c); to be patently erroneous.

Gitanjali Associates vs. State of Uttarakhand & Ors (2011) NTN (Vol. 47) – 16.

3. Contempt of Court

The Andhra Pradesh High Court held that it was not permissible for the authorities under the Act to ignore the judgments of the jurisdictional High Court or refuse to apply them; on the pretext that the State had filed an appeal to the Supreme Court and the same was pending or that the actions were being taken to file an SLP. Such defiance clearly amounted to contempt of court and was liable to be proceeded against before the appropriate court.

State of Andhra Pradesh vs. Commercial Tax Officer & Anr. (2011) 19 STJ 333 (AP).

4. Dealer

Educational institution

The Uttarakhand High Court held that Educational Institutions supplying food to its residential students was not a dealer since the primary object of such institution was to impart education to students residing in the hostel. The High Court set aside the levy of tax on the supply of food by treating it as the transactions of sale of food to the students. In that connection the court observed that the provisions of deemed sale u/s. 2(40)(f) of Uttarakhand VAT Act was applicable only to the persons doing business of buying or selling goods.

Scholars Home Senior Secondary School vs. State of Uttarakhand & Anr. (2011) 19 STJ 311 (Uttara).

5. Dismissal for default of Advocate

The Supreme Court set aside the order of the High Court passed in absence of the Advocate and thereafter refusing to recall the same on the footing that there was no satisfactory explanation for absence of the Advocate. The Supreme Court in that connection observed as under :

"Under our present legal system, the parties generally appear through their advocates – the obligation of the parties is to select his advocate, brief him, pay the fees demanded by him and then trust the learned advocate to do the rest of the things. After engaging a lawyer, the party may remain supremely confident that the lawyer will look after his interest. At the time of hearing of appeal, the personal appearance of the appellant is not required nor it is hardly useful. Therefore, the party having done everything in his power to effectively participate in the proceedings can rest assured that he has not go to the Court to inquire as to what is happening in the Court with regards to his appeal nor he has to act as a watchdog of the advocate that he appears in the matter when it is listed. Maybe the advocate absented himself deliberately or intentionally. But, the appellant cannot be made to suffer injustice merely because his chosen advocate has defaulted."

Thus, Supreme Court allowed the appeal, and set aside the orders of the High Court dismissing the appeal and refusing to recall that order.

Note : The above observations are reproduced herein because many such instances are noticed all over the country. The decision of the Supreme Court would be very useful in such cases It will also open up the eyes of Advocates about their obligations while representing their clients before various authorities, Tribunal and courts.


Rafiq & Anr vs. Munshilal & Anr., (2011) 19 STJ 342 (SC).

6. Entries to Schedule – Table margarine

A) Stay of operation of judgment

The Supreme Court admitted the SLP against the judgment of the Bombay High Court (39 VST 302) holding table margarine was not covered by entry relating to vegetable oil since the contents of 80% palm oil and 20% fatty acid, salt water and skimmed milk were obtained by emulsification and not hydrogenation. The apex court also stayed the operation of the said judgment.

Cadila Healthcare Ltd vs. Commissioner of Sales Tax, Mumbai Special Leave to Appeal (Civil) No. (S). 19208/2011. Sales Tax Review Sept., 2011 P. 74.

B) Mobile handset

The Madhya Pradesh High Court – Jabalpur Bench held that the mobile handset was covered by entry 49 of Schedule II of the Entry Tax Act relating to "wireless reception instruments and apparatus". The court in that connection observed that the general words used in the Act were to be construed so as to cover new inventions unknown when the Act was passed.

Drive India Dot Com Ltd. vs. State of M. P. & Ors. (2011) 19 STJ 274 (MP).

7. Inter-State Works Contract – Prior to May 2002

A single Judge Bench of the Allahabad High Court held that the inter-State transaction of the works contact, undertaken by the assessee can be subjected to tax on the value of goods in which there was transfer of property involved in execution of such works contract in other State without depending on the amendment carried out to the definition of the term "sale" in section 2(g) of the CST Act by Finance Act, 2002. The levy of the inter-State Sales Tax u/s. 6 however was not an issue before the court. The court followed the judgment of the Supreme Court in the case of Bengal Immunity Co. Ltd., (6 STC 446) and Onkarlal Nandlal (60 STC 214) for holding that the location of the situs of sale had no bearing to the chargeability of tax, on sale which look place in the course of inter-State sale, etc. Such a power was not vested with the State legislature.

NOTE: With due respect, the above judgment by the Hon’ble single judge, appears to be contrary to several earlier judgments in which it was held that the inter-State works contract cannot be subjected to tax under the CST Act during the period prior to the amendment of the term "sale" by Finance Act, 2002. This judgment therefore requires reconsideration.


Rungta Irrigation Ltd vs. Commissioner Trade Tax 2011 NTN (Vol. 47) 4.

8. Purchase Tax on Sugar Cane – Exemption

The Bombay High Court, by its order dated 10th December, 2010 had earlier directed the State Government to consider the application submitted by the assessee u/s. 12B of the Maharashtra Purchase Tax on Sugar Cane Act, 1962. The State Government thereafter rejected the application for exemption.

In the meanwhile, the assessee had submitted returns for three financial years namely 2008-09, 2009-10 and 2010-11 on the assumption that the exemption as requested would be granted.

In 2002, the State Legislature enacted the VAT Act, 2002 but the same was to be brought into force only after the date was notified in the Official Gazette. Section 95 of the said Act then provided for repeal of the Sugar Cane Purchase Tax Act along with other existing allied laws. The VAT Act ultimately was notified to be enforced from 1st April, 2005 but before that, by another amending Act, the repeal of Purchase Tax on Sugar Cane Act was removed. Thus on the 1st day when the MVAT Act came into force, section 95 stood amended to repeal all other Acts previously notified except the aforesaid Sugar Cane Purchase Tax Act.

The assessee challenged the validity of the said amending Act to the effect that once the legislature passed the 2002 Act, the Purchase Tax on Sugar Cane stood repealed and it cannot be revived.

The Hon’ble High Court rejected the challenge by holding that the 2002 Act, though passed by the State Legislature; was never brought into force by the State Government. The amended 2002 Act before enforcing it, did not specify the Purchase Tax on Sugar Cane Act in the list of enactments repealed. Such a legislative exercise was held to be within the plenary power of State Legislature. Consequent to such a conclusion, the enabling power u/s. 12B providing for remission of Tax was held to be of no help to the Petitioner. The Writ Petition therefore was dismissed.

M/s. Vithal Sugar Manufacturing Ltd vs. State of Maharashtra Writ Petition No. 7356 of 2011 dated 8th Sept., 2011.

9. Reference dismissed for default

Before the Bombay High Court, the revenue – Commissioner of Sales Tax as applicant in Sales Tax References, did not remove the office objections raised by the office of Prothonotary and Senior Master in as many as 82 cases. All those cases were lying unattended to in the Record Section after the paper books were received from the Registrar of the Maharashtra Sales Tax Tribunal, therefore all those cases were dismissed by Prothonotary and Senior Master under Rule 986 of the Bombay High Court (Original Side) Rules.

Thereafter a Notice of Motion was taken out by the State and a copy thereof was served on one of the assessees i.e. the Respondent. While the said Notice of motion was pending before the Division Bench of the High Court, the applicant again moved the Prothonotary, for restoration of References so rejected under Rule 986. The applicant at that time also did not serve any notice on any of the Respondent assessees. The Prothonotary and Sr. Master however was prevailed upon by the State to set aside the dismissal order.

When later on, the notice of motion came up for hearing before the Division Bench of the High Court. The Respondent (One of the affected assessees) brought the above facts to the notice of Division Bench and the improper conduct of the applicant-revenue, in the process before the Prothonotary as well as before the Court.

The High Court observed that the dismissal of a Reference for non-removal of office objection, under Rule 986 of the High Court Rules, created a right in favour of the opposing party i.e. the assessees. After the dismissal, each of such party was required to be made aware about the proposed restoration through a Notice, seeking their say in the matter.

On the facts stated above, the ex-parte restoration by Prothonotary and Sr. Master was held to be contrary to law. The Division Bench set aside the Restoration. The Hon’ble Court also directed the Prothonotary and Senior Master to place before it, all the remaining 81 cases for directions. The instant Reference however was rejected without giving its opinion on the questions of law referred to it by the tribunal.

The Commissioner of Sales Tax vs. M/s. Tata Engineering & Locomotive Co., Ltd., Sales Tax Review Sept., 2011 P. 87.

10. Sale at Bombay High – Offshore Area

The Gujarat High Court after considering the provisions of the Constitution, Maritime Zone Act, 1976 and the enabling powers of the Central Government to issue notifications for extending the provisions of any particular enactment to the exclusive economic zone and various judgments cited by both the parties held that Bombay High did not form part of India or any Coastal State. Since Central Sales Tax Act was not extended, by issue of notification, to the continental shelf or the exclusive economic zone, the said Act was not applicable to Bombay High – Offshore area. The levy of tax on goods supplied from Hazira (Gujarat) to ONGC at the Bombay High area under the Central Sales Tax Act, by the State of Gujarat was set aside.

At the request of the State of Gujarat the Court granted time of eight weeks from the date of the judgment for granting the refund of the amount deposited by the petitioner pursuant to its earlier order dated 27th April, 2011.

Larsen & Toubro Ltd vs. Union of India Special Civil Application No. 5575 of 2011 decided on 2nd Sept., 2011.

11. Sale – Liability of Excise Duty – Distribution of free samples amongst physicians

Before the Supreme Court, the question about the liability to pay the exercise duty on production of articles meant for free distribution amongst the Medical Doctors arose. The assessee denied its liability on the footing that the packets meant for free distribution were not "goods" nor could it be sold under the provisions of section 18 of the Drugs Act read with Rule 65(18) framed thereunder.

The Supreme Court, after considering the principles for deciding the nature of the item, held that the Excise duty was levied on the event of production and was not dependent on its sale in the market. According to the apex court the primary reason of distributing free samples amongst physicians was only for the purpose of publicity and consequential prescriptions in future so that the sale of the product can increase. The excise duty was thus held to be leviable on the production of the drugs meant for free distribution.

Medley Pharmaceuticals Ltd vs. Commissioner of Central Excise & Customs (2011) 58 S.T. A. P.125.

12. News from West Bengal

The Finance Minister of West Bengal while introducing the Finance Bill, have proposed several changes in the West Bengal VAT Act so as to remove or reduce the official interference in the tax affairs of the dealers. The object seems to be of reducing the personal interaction between the tax payers and the personnel of the department leading to reduction in the period of delay and corruption.

In order to reduce the pending cases of litigations, it has been decided that the cases involving amount disputed up to ` 20 lakhs would be transferred to fast track banches so as to dispose of the same by September, 2012 while the cases in which the Recovery Revenue Certificates were issued, the option is given to settle the same on payment of 25% of the demand and 5% of the interest with a limit of ` 1 lakh.

The cumbersome procedure of possessing a way bill while bringing the goods into the State, have been dispensed with, for all dealers who have paid tax of more than three crore in the earlier year, as well as for PSUs.

By amendment of Section 84(2) under the West Bengal Value Added Tax Act, 2003 the first proviso has been substituted so as to provide for the deemed disposal of appeal as claimed by the appellant if the appeal was not disposed of within the period mentioned therein. In other words the appeals filed within first six months have to be decided by 30th September of the next year while the appeals filed in the second half of the year have to be disposed of by 31st March, of the succeeding year.

This is a welcome amendment which is required to be followed by other States for timely and immediate redressal of the grievance of the tax payers.

Source : (2011) 58 S.T.A. P. 1802

1. Schedule entries

1. Vacuum Cleaner

Vacuum cleaner falls under "Electrical goods" which were defined in an inclusive manner under the Bihar Finance Act.

Eureka Forbes Ltd. vs. State of Bihar (2011) 43 VST 303 (S.C.)

2. Piston rings used in automobiles – Declared goods

Piston rings designed / manufactured for use in automobiles were held to declared goods and not auto parts by virtue of their special inclusion in the list of declared goods in Section 14(iv)(viii) of the CST Act – Discs, Rings, Forgings and Steel castings

State of Punjab vs. Federal Gogul Goetze (India) Ltd. (2011) 43 VST 100 (P & H)

3. Mouth Freshener (Mukhwas)

Mouth freshener was held to be a distinct commodity in common parlance – distinct from the ingredients (Spices) that went into its making. Hence, it could not be covered under the entry, C-91 which read as "Spices of all varieties and forms". The entry would cover only products which retain their essential character of being a spice. Hence, mouth freshener was taxable under the residuary entry.

CST vs. Swastik Trading Co. (2011) 44 VST 241 (Bom.)

4. Stainless Steel Gas stove

It cannot be classified as a stainless steel product under Entry A-28 of Punjab General Sales Tax Act, 1948 since the stainless steel body was merely an accessory which gives more convenience, beauty and protection to the stove but all other important functional attachments of the stove were made of non-stainless steel material.

Excise & Taxation Commission, Punjab vs. Sirhind Gas Sirhind (2011) 44 VST 185 (P & H)

5. Mobile Hydraulic Crane

It does not fall under "Hoists & Lifts" but under the expression, "similar variety of machinery" in the schedule entry relating to "Crane Lorries".

State of Tamil Nadu vs. Coimbatore Alcohol & Chemicals Ltd. (2011) 43 VST 89 (Mad.)

2. Transfer of Right to Use goods

1. Supply of Electricity meters to consumers

The A.P. High Court held that supply of meters to consumers for measuring electricity supplied against which Rentals were collected amounted to transfer of right to use goods. The petitioner’s contention that the meters were "immovable property" being attached to the earth was not accepted. The Court, on the basis of the relationship between the Electricity Transmission company and the consumers and their contractual rights and obligations and the provisions of the Electricity Act, Electricity Supply Act and other related laws held that the Meters were meant for the exclusive use of the consumer and all the ingredients of transfer of right to use the goods were present. Hence, Meter rentals were liable to be taxed under APGST Act, 1957.

A.P. State Electricity Board vs. State of A.P. (2011) 43 VST 359 (A.P.)

2. Hire of Audio – Visual equipment by a Hotel to its customers

Hire of audio-video visual equipment whereby the equipment was to be used solely by the customer and no operator was provided either by the outsourcing agency or the hotel amounted to transfer of right to use equipment and was a deemed sale within the purview of Article 366(29A)(d). As the dealer did not render any service in relation to the A/V equipment, it was not a contract for services. In the absence of evidence that the dealer had paid service tax, the Court held that the dealer could claim refund of service tax in appropriate legal proceedings. Interestingly, Central Excise and Service Tax Dept. was also afforded an opportunity of being heard.

Viceroy Hotels Ltd. vs. CTO (2011) 43 VST 424 (A.P.)

3. Hire of Transit Concrete Mixer

G manufactured ready mix concrete (RMC) at batching plants in Hyderabad. Dealers entered into agreements with G to provide transportation services for shipping RMC by hiring specially designed Transit Mixers. The dealers were required to provide a fleet of Transit mixers painted in a particular style and colour as per the brand name of G to transport RMC as per delivery schedules to be given by G. Although Drivers were providers by the Dealers, they were to obey instructions issued by G and adhere to delivery schedules given by G. Full control on the method, manner and time of using the Transit mixers owned by the dealers vested absolutely with G. Under the circumstances, the Court held that there was transfer of right to use the goods.

G.S. Lamba & Sons vs. State of A.P. (2011) 43 VST 323 (A.P.)

4. Order prejudicial to Revenue – Meaning

The A.P. High Court has ruled that the expression would ordinarily mean that the order is not in accordance with law and as a consequence lawful revenue due to the State has not been realized or cannot be realized. Ordinarily, if the legitimate revenue has been realized, though as a result of an erroneous order, the order cannot be revised. However, the expression should not be restricted to a case where the order can be said to be prejudicial to the Revenue administration.

GMMCO Ltd. vs. State of A.P. 43 VST 312 (A.P.)

5. Supply of SIM Cards – Sale or Service?

Supply of SIM cards by Mobile Telephone Operators forms part of the value of taxable service and not sale of goods since SIM cards are not sold as goods independent of the services provided. The value of SIM cards forms part of the activation charges as no activation was possible without a valid functioning SIM card. The S.C. has thus, in the light of material now brought on record and which was not available while deciding BSNL’s case (2006) 3 VST 95 (SC), held that the supply of SIM cards was merely incidental to the service being provided and facilitated the identification of the subscriber, their credit, and other details and was not liable to sales tax. The State of Kerala had also dropped proceedings for levy of sales tax on SIM cards and the issue was settled beyond doubt that only service tax was applicable.

Idea Mobile Communications Ltd. vs. CCEC (2011) 43 VST 1 (S.C.)

6. Goods supplied in execution of a turnkey contract in Bombay High would not be liable to Central Sales Tax

The petitioner was engaged in the business of manufacturing engineering goods and execution of works contracts in different parts of the country including the State of Gujarat. The petitioners entered into contracts with ONGC to execute turnkey contracts entailing supply of certain parts, equipment and machineries from its Hazira plant at Surat to ONGC at Bombay High, situated around 180 kms. off the baseline of coast of India and forming part of "Exclusive Economic Zone". The goods were used in execution of the turnkey project located in Exclusive Economic Zone and only on commissioning that the petitioners' obligation under the contract were to stand
discharged. The petitioners made a two-fold contention –

i. that there was no inter-State sale because the goods did not move from one state to another State.

ii. That the goods were said to be exported outside India.

The petitioners also contended that if at all the transaction was taxable, tax was to be levied at 4% if Form C could be provided by ONGC.

The High Court ruled that Bombay High was not part of the territory of India as per Article 1 of the Constitution although the Union of India has certain limited sovereign rights for the purpose of exploration, exploitation, conservation and management of the natural resources. It is only by virtue of the notification in Official Gazette that the Central Government may declare any area of exclusive economic zone to be a designated area and make such provision as it may deem necessary with respect to such area for different purposes including for the purpose of customs and other fiscal matters in relation to such designated area. The language used in clause (b) of sub-section (7) of section 7 to the Maritime Zones Act, 1976 does not provide that the designated area upon notification by the Union of India shall be part of the territory of India. It provides that law so notified shall be extended as if the exclusive economic zone or the part thereof is a part of the territory of India.

The language gives rise to a deeming fiction for the limited purpose of extension and application of laws that are notified and for that limited purpose Exclusive Economic Zone shall be deemed to be a part of the territory of India. It is not to suggest that Exclusive Economic Zone becomes part of the territory of India.

Hence, when the sale of goods took place at Bombay High, for which the goods moved from Hazira to Bombay High, such movement does not get covered within the expression "movement of goods from one State to another" contained in clause (a) of Section 3 of CST Act. As no notification has been issued extending all or any of the provisions of CST Act to any of the designated areas, continental shelf or Exclusive Economic Zone, no tax can be demanded under the CST Act.

The Hon’ble High Court, however, did not express any view on whether or not such supplies can be considered as export or deemed export.

Larsen & Toubro vs. State of Gujarat – Special Civil Application 5575/2011 decided on 2-9-2011.

7. Genuineness of Forms

Revisional authority suo motu disallowed deduction on the ground that the buying dealer was in fact unregistered and had used forms which had been stolen from the Department. The Tribunal reversed this with observation that the forms being admittedly genuine, the dealer had no means to ascertain whether the dealer who presented the genuine forms was in fact a registered dealer or not. The Court held that the claimant dealer had only to satisfy that the purchasing dealer was genuine. The Purchasing dealer had furnished genuine forms duly issued by the Dept. carrying the official seal of the Issuing office and initials of the Issuing authority, the name and address of the Purchasing Dealer and its alleged registration number. No action had been taken against the purchasing dealer. As this was not a case where the Dept. was not satisfied about the genuineness of the stand of the dealer, the deduction was held to be rightly allowed by the Tribunal.

State of Haryana vs. Inalsa Ltd. & Anr. (2011) 42 VST 192 (P & H)

8. No denial of Input tax credit for non payment of tax by Seller

The Punjab & Haryana High Court has held that there can be no denial of input tax credit to the claimant dealer on account of non-payment of tax by the selling registered dealer in the treasury unless it was fraudulent, or in connivance with the registered selling dealer. The onus upon the assessee gets discharged on production of Form VAT C-4 which is required to be genuine and not thereafter to substantiate its truthfulness by running from pillar to post to collect the material for its authenticity. In the absence of any malafide intention, connivance or wrongful association of the assessee with the selling dealer or any dealer earlier thereto, no liability can be imposed on the principle of vicarious liability. Law cannot put such onerous responsibility on the assessee as otherwise, it would be difficult to hold the law to be valid on the touchstone of Articles 14 and 19 of the Constitution of India.

The selling-registered dealer who had collected tax from the purchasing-registered dealer acts as an agent for the Government. Still further, "paid" would mean and embrace within it "ought to have been paid" as enunciated in Elphinstone Spinning and Weaving Mills Co. Ltd.’s case. The rule of reading down is to construe a provision harmoniously and to straighten crudities or ironing out creases to make a statute workable. Hence, while holding that the provisions of Section 8(3) of the Act and the sub-rules (1) and (4) of Rule 20 of the Rules were not ultra vires, the same shall be read down and operative in the manner indicated above.

Gheru Lal Bal Chand vs. State of Haryana decided on 23-9-2011

3. Works contracts

1. Processing of exposed photographic film rolls and negatives was not a works contract as they were not "goods" as they do not satisfy the test of marketability – they have no utility for anyone not even the owner. Besides, even if chemicals used in developing were "goods", the property in the same was not transferred to the customer. Hence, it was a case of rendering a service specific to the customer and was a matter of skill and expertise of the Developer but not a works contract. The Court also explained that Rainbow Colour Lab (2000) 118 STC 9 (S.C.) could be said to be overruled only to the extent of composite contracts covered by Article 366(29A) to which the dominant nature test did not apply and not as regards other contracts not covered by Article 366(29A). In the present case, BSNL (2006) 3 VST 95 (S.C.) was squarely applicable and hence the contract was not a "works contract".

S.S. Photographic Lab P. Ltd. vs. State of Assam (2011) 44 VST 39 (Guwahati).

2. Manufacture of spectacles not a works contract

The dealer was a manufacturer of spectacles based on the orders placed by the customers. The lens purchased was ground and transformed into lens with the desired power specified in the prescription. While the lens underwent transformation, the frames remained the same and hence, would not attract tax again being a second sale. Only the lens were liable to tax by virtue of being a sale at the point of first sale in the State.

State of Tamil Nadu vs. Lakshmi Opticals (2011) 43 VST 33 (Mad.)

3. Sale in the course of Export u/s 5(3) of the CST Act

Export claim u/s 5(3) of the CST was denied where ginger was purchased, reduced to powder and then sold in the powdered form since the commodity exported was different from that purchased.

Kurian Abraham vs. State of Kerala (2011) 44 VST 112 (Ker.)

4. Estimation of Turnover

The Madras HC concurred with the finding of the Tribunal that the estimation of turnover merely on the basis of treating the Quotation book as the Sale bills without proving that sales had in fact taken place as per the quotation book was improper.

State of Tamil Nadu vs. Marble Palace (2011) 43 VST 519 (Mad.)