YESYEM ARECANUT CO. Vs. STATE OF KERALA

JUDGEMENT

(1.) These appeals are directed against the judgment and order passed by the High Court of Kerala at Ernakulam in W. A. No. 34 of 2003 (D), etc., dated January 31, 20031, whereby and whereunder the High Court has confirmed the judgment and order passed by the learned single judge in O.P. No. 38435 of 2001, etc., dated December 18, 2002 and dismissed the appeals filed by the Appellants herein. Short facts are as follows : the Appellants are engaged in the business of dealing in arecanuts as a commission agent. The Appellants purchase arecanuts from the local growers and thereafter, dispatch the same to the dealers located outside the State of Kerala. The Appellants are entitled for a commission on such sales.

(2.) The commodity in question, viz., arecanut falls under entry 7 of the First Schedule to the Kerala General Sales Tax Act, 1963 ("the Act", for short). So far as local purchase of arecanut is concerned, it is liable to tax at the last point of purchase by the dealer liable to tax under Section 5(1) of the Act in the State. Whereas it is taxable at the point of first sale in the State by the dealer liable to tax under Section 5(1) of the Act if imported from outside the State.

(3.) The dispute relates to the assessment year 1999-2000, the period commencing from January 1, 2000 to February 5, 2000. The rate of tax for arecanut up to December 31, 1999 was five per cent. In the assessment year 1999-2000, under the Kerala Taxation Laws (Amendment) Ordinance, 1999 the rate of tax was enhanced from five per cent to eight per cent with effect from January 1, 2000. The Appellants, pursuant to the aforesaid amendment, had paid tax at the rate of eight per cent on the purchase turnover of arecanuts to the State. By notification G.O.(P) No. 12/2000/TD dated February 5, 2000 published as S. R. O. No. 127 of 2000 (for short, "the notification"), the rate of tax on the sale of arecanut was reduced from eight per cent to four per cent with retrospective effect from January 1, 2000. The said notification provisioned for payment of tax collected by the dealers and prohibited the refund of tax already paid. The issue raised in these appeals lies in a very narrow compass and relates to interpretation of the said notification. The same is extracted hereunder: