2026-VIL-656-MAD
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VAT High Court Cases

Tamil Nadu General Sales Tax Act, 1959 - Classification of Gold Coins - Bullion vs Articles of Gold – Department’s appeal challenging the order of the Sales Tax Appellate Tribunal which classified gold coins embossed with the picture of Goddess Lakshmi as bullion liable to tax at 1% instead of 4% as articles of gold - Whether gold coins embossed with the picture of Goddess Lakshmi and mixed with copper should be classified as bullion in uncoined form or as articles of gold – HELD – The term bullion, according to its ordinary and popular meaning, refers to gold or silver in the mass, either in raw form or as ingots or bars, representing unwrought material. Whereas, Gold coins that have undergone a manufacturing process with specific markings and engraved pictures constitute value addition and lose the character of bullion, becoming finished metal items. The embossing or engraving of pictures carries inherent value addition that transforms the raw material into a different commercial product - In common trade practice, gold coins with engraved pictures are not sold at prices equivalent to bullion rates, but at prices reflecting value addition including making charges and wastage. The fact that the respondent-assessee itself realized that part of the turnover was taxable as gold jewellery and collected higher tax rates supports the position that such coins are articles of gold, not bullion – The words in tax legislation must be interpreted according to common parlance and popular sense, not in any technical or scientific sense. The assessment order passed by the Appellate Authority is restored, classifying the gold coins as articles of gold taxable at 4% - The order of the Sales Tax Appellate Tribunal is set aside and the Tax Case Appeal is allowed
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