K.C.P. Ltd Tax Revision Dismissed

Authority: High Court of Judicature at Madras

Order Date: 01-10-2026

Case Overview

• Parties: The State of Tamil Nadu (represented by the Deputy Commissioner, Chennai East Division) as petitioner versus K.C.P. Ltd, Chennai, as respondent.
• Case Numbers: TC Nos. 10 & 16 of 2020, both filed under Section 38 of the Tamil Nadu General Sales Tax Act, 1959, seeking revision of orders dated 27‑10‑2003 (STA No.281/2002 and STA No.286/2002) passed by the Tamil Nadu Sales Tax Appellate Tribunal (MB), Chennai.
• Background: The matters arise from the transfer of an appeal originally filed before the Tamil Nadu Special Tribunal, Chennai, after its abolition. The issues were previously addressed in TC(R) No.27 of 2015 and TC(R) No.41 of 2009 concerning the same assessee.
• Core Issues:

1. Whether the Tribunal was correct in deleting turnover relating to free customer‑supplied materials used in manufacturing machinery, where excise duty had been levied on the full machinery value.

2. Whether the penalty imposed under Section 12(5)(iii) of the Tamil Nadu General Sales Tax Act for filing incorrect and incomplete returns (omitting turnover from free materials, sale of assets, and sale of ex‑im scrips) was legally valid.

• Observations: Both parties agreed that the questions raised in TC(R) No.27 of 2015 applied. The Court referred to the ratio of the order in TC(R) No.41 of 2009, which held that the free‑supply material value (Rs.3,500) could not be included in the sale consideration and that there was no justifiable ground to confirm the assessment.

Final Outcome

• The High Court dismissed both Tax Case revisions (TC Nos.10 & 16 of 2020) in favour of the assessee, K.C.P. Ltd.
• No costs were awarded to either party.

Topics: Tax Revision, Tribunal Decision, High Court Judgment