LAKSHMI COCONUT INDUSTRIES Vs. STATE OF KARNATAKA

JUDGEMENT

(1.) The sixteen sales-tax appeals are preferied by two dealers in desiccated coconut, aggrieved by the orders of the Commissioner of Commercial Taxes made in exercise of his suo motu power of revision under S. 22-A of the Karnataka Sales-tax Act, (hereinafter referred to as 'the Act') setting aside the orders of the assessing authority for the relevant assessment years exempting their inter-state sale turnover cf desiccated coconut from sales-tax under the provisions of the Central. Sales- tax Act, 1956 (hereinafter referred to as 'the Central Act') and bringing the same to tax under S 8 of the Central Act. Four revision petitions are preferred by the State aggrieved by the order of the Karnataka Appellate Tribunal upholding the claim of the respon lentfirm therein, which is also a dealer in desiccated coconut that inter-state sales of desiccated coconut are not exigible to tax under the Central Act. All these cases were heard together and are being disposed of by this common judgment as the same question of law arises for consideration in all these cases which is as follows: Whether, the assessees, who had effected inter-state sales of desiccated coconut prepared by them out of the coconuts purchased by them within the State, were not liable to pay Central Sales-tax on the sale turnover of such desiccated coconut, under S. 8 of the Central Act, on the ground that they had paid purchase tax on ihe coconuts as prescribed under S. 5 (4) read with entry 5 of the Fourth Schedule of the Act and that desiccated coconut is the same as coconut, which is one of the 'declared goods' under S. 14 of the Central Act?

(2.) The relevant statutory provisions on the interpretation of which these cases have, got to be decided and the facts of the case which have given rise to these appeals and revision petitions, are as follows:

(3.) Before proceeding to consider the cases on merits, it is necessary to refer to an ambiguity created by the amendment of the relevant part of entry 5 of the Fourth Schedule to the Act by Act No. 7 of 1970 which corresponds to sub-clause (viii) of clause (iv) of S. 14 of the Central Act No. 61 of 1972 with effect from 1-4-1973. The entry before amendment was: 'coconut and copra' The entry after amendment reads,: 'coconut (i.e., copra, excluding tender coconuts). The relevant entry before the amendment was clear and specific. Both coconut and copra were declared goods and both of them were included at entry 5 in the Fourth Schedule to the Act and consequently tax under the Act was leviable only at purchase point and at the rates specified in the Fourth Schedule in view of S. 5(4) of the Act. According to the amended entry the word 'coconut' is qualified by the expression i.e., 'copra excluding tender coconut' which means that only copra is the declared goods and not the coconut. Further if copra alone was sought to be included, it would have been sufficient to mention only the word 'copra' or to mention 'coconut i.e., copra' and it was unnecessary to use the words 'excluding tender coconuts after the word 'copra' as the word copra itself excludes tender coconuts. The use of the words 'excluding tender coconuts' would be nessessary only to qualify the, word 'coconut' when only matured coconut is sought to be included and tender coconut is sought to be exempted. When the attention of the learned counsels was drawn by us to the effect of the amended entry, learned counsel for the assessees submitted that even, after the amendment, the State) has consistently taken the view that both coconut and copra are declared goods and that only tender coconut is excluded from the entry, though they agreed that the entry should have been 'coconut excluding tender coconut and copra' or copra and coconut excluding tender coconut'. At this stage the case was adjourned in order to enable the State to clarify the matter and to take, a specific stand on the interpretation of the entry. When the matter came up again for hearing, learned counsel for the State submitted that according to the view taken by the State also both coconut (excluding tender coconut) and copra are declared goods. Therefore we proceed on the basis that coconut and copra are declared goods under section 14 of the Central Act and that both are included in entry 5 of the Fourth Schedule to the Act.