1. The point is controversy in this case is whether the paper cones and tubes manufactured by the petitioner and sold to textile mills would attract concessional levy at four per cent as per Notification in G.O.P. No. 1316, dated October 7, 1988 or would attract higher rate of tax at eight per cent. For the year 1991-92 the assessing officer by an order dated December 15, 1992 declined the concessional rate of tax at four per cent and treated the paper cones and tubes as packing materials and not as textile machinery part. The petitioner preferred an appeal in A.P. No. 7 of 1996, dated December 7, 1993 before the Appellate Assistant Commissioner (CT), Virudhunagar. By his order dated December 7, 1993 the appeal was allowed holding as follows : "The Sales Tax Appellate Tribunal (AB), Madurai in MTA No. 77 of 1993, dated September 14, 1993 in the case of the appellants themselves have decided that paper tubes and cones are taxable at four per cent. Since the appellants have sold paper cones, which were designed to be used as parts of textile machineries, they are eligible for the concessional rate of tax at four per cent." 2. In exercise of suo motu powers, the Joint Commissioner issued a show cause notice dated July 11, 1994. In that notice he stated that paper cones and tubes are only the packing materials for wrapping yarn and it is taxable at five per cent multi-point up to March 31, 1990 and thereafter it is taxable at eight per cent single point as per Special Commissioner and Commissioner (CT), Ref. No. Acts Cell-I/99910/93, dated December 2, 1993. Objections, if any, to the above proposals were directed to be filed within 15 days. Such objections were filed by the petitioners. By orders dated March 9, 1995 the objection of the petitioners were overruled and the order of the assessing officer was restored. In that order it was held as follows : "The petitioner is manufacturing and selling paper cones and tubes to textile mills. But the point is whether such kind of paper cones would fall under textile machinery or whether it would be packing materials as held by the assessing officer." 3. In the notification dated October 7, 1988, it was stated as follows : "As per the notification item No. 9 includes cones and tubes. Since this cones and tubes are intended to act only as a packing materials for wrapping yarn in order to prevent them from entangled, they are not parts of textile machinery. In the textile machinery there are already metallic cones and they form part of the machinery but not paper cones which are removable." 4. Thiru P. Radhakrishnan, learned counsel for the petitioner submits that the Joint Commissioner (SMR) had exceeded his jurisdiction by not giving effect to the notification dated October 7, 1988 which gives a concessional rate of levy for textile machinery spares including cones and tubes. There is no restriction that the cones and tubes should be metallic cones and tubes or they should be permanently fitted to the textile machinery. On the contrary if the notification is given its full sweep and ambit it would undoubtedly include paper cones and tubes. These cones and tubes are admittedly used as part of the textile machinery in the manufacturing process of yarn from cotton. The assumption of the Joint Commissioner that only metallic cones and tubes would be eligible for concessional levy is untenable and unsustainable.
5. Thiru K. Raviraja Pandian, Additional Government Pleader (Taxes) would contend that cones and tubes which are removable cannot be characterised as textile machinery spares and at the most it may only be accessories.
6. Having considered the rival submission, it is held that since "cones and tubes" have been included in the notification granting concession and there is no restriction that the cones and tubes should be made of metals or that the cones and tubes should be made permanently embedded in the machinery, there is no justification for agreeing with the conclusion of the Joint Commissioner that metallic cones and tubes alone will be eligible for concessional rate of tax and not paper cones and tubes. The order of the Joint Commissioner is set aside and order of the Appellate Assistant Commissioner is restored. The delay in representation of the petition is condoned.
And this Tribunal doth further order that this order on being produced be punctually observed and carried into execution by all concerned.
Issued under my hand and the seal of this Tribunal on the 17th day of September, 1996.