The central legal point established in the judgment is that the process of converting wet blue leather into finished leather amounts to a manufacturing activity, as determined by the interpretation of relevant legal provisions and the application of the court's precedent in Golden Leathers v. Secretary, TNSTAT.

S. Manikumar, J.

1. Tax Case Revision is filed against the order, dated 06.12.2011, passed in S.T.A.No.129 of 2011, passed by the Tamil Nadu Sales Tax Appellate Tribunal (Additional Bench), Chennai, for the assessment year 2005-06.

2. Short facts leading to Tax Case Revision are that the respondent-assessee, Tvl.Habib Leather Manufacturing Co., Chennai, was assessed on a total and taxable turnover of Rs.l,63,54,414/- and Rs.l,28,662/- respectively, under the Tamil Nadu General Sales Tax Act, 1959 (In short, "TNGST Act"), for the assessment year 2005-06. During the course of check of accounts, it was found that the dealers had effected purchase of chemicals and consumable, against Form XVII, to tune of Rs.44,662/-, and used the same, in the process of conversion of wet blue into finished leather. The Assessing Officer was of the view that there was no manufacturing activity involved in conversion of wet blue hides into finished leather and hence, the dealers were not eligible to purchase chemical against Form XVII at concessional rate. Therefore, the Assessing Officer levied differential rate of tax of 9% on Rs.44,662/- and also surcharge. He also levied penalty under section 23 of the TNGST Act, 1959, at Rs.2,110/-.

3. Aggrieved against the order of the Assessing Officer, the respondent filed an appeal before the Appellate Deputy Commissioner (CT), who allowed the appeal. Against which, the Joint Commissioner (CT), Chennai (Central) Division, Chennai, petitioner herein, has preferred appeal in S.T.A.No.120 of 2011, before the Tamil Nadu Sales Tax Appellate Tribunal (Main Bench), Chennai. Following the decision of this Court in Golden Leathers v. Secretary, TNSTAT reported in [2010] 35 VST 216 (Mad.), on 14.08.2012, the Appellate Tribunal, has passed the following orders,

"Heard both sides. At the time of hearing, the learned State Representative (F AC) has argued that already similar issue has been decided by our Honourable High Court in W.P. No.3000/2008 dated 22.04.2010 in the case of Tvl. Golden Leather Tannery Vs. Sales Tax Appellate Tribunal, Chennai. In that order, Writ petition was disposed of in favour of the assessee. As against that judgment, the State intends to the SLP before the Honourable Supreme Court. Hence, this State appeal has been filed. If at all aggrieved as against the order passed by the first appellate authority, the State ought to have filed appeal stating the grounds how and what way the first appellate authority's order was not in accordance of law. Instead of stating that grounds (i.e.) why the first appellate authority's order is not sustainable, it is simply mentioned in the grounds of appeal that the issue has been decided in favour of the assessee by our Honourable High Court, and the State Department intends to prefer the SLP before the Supreme Court. The reason stated by the State Representative is not at all acceptable one. It is very clear that the appellant/State has casually filed this appeal without applying its mind. Suppose, if already the appeal is filed and pending for disposal, then if similar issue is pending and to be decided by the Higher Forums, i.e. High Court or Supreme Court, then the party can file a petition to defer the hearing, till the issue is settled by the Higher Forum. Instead of that, this appeal is filed as if the State is going to file appeal and hence, they are filing this appeal is simply abuse of the process of law. Anyhow, since the appeal is filed, we also peruse the records and pass orders, on merits also.

9. The first appellate authority relying on the judgment of the Honourable High Court in W.P.No.3000 of 2008, dated 22.04.2010 that the activity done by the dealer/assessee amounts to manufacturing process. hence, they are eligible to purchase chemicals against Form XVII for the leather. Accordingly, allowed the appeal. In the instant case, there is no dispute that the respondent had used all the raw materials purchase by him against Form XVII declara