STATE OF KARNATAKA Vs. GOA GRANITES

JUDGEMENT

(1.) THE Revenue is before this Court, being aggrieved by the majority opinion expressed by the learned Judges of the Karnataka Appellate Tribunal in STA Nos.1176 and 1177/2000 dated 30th day of November 2002.

(2.) A two judge bench of the Karnataka Appellate Tribunal by invoking their powers under Regulation 54 (a)(ii) of the Karnataka Appellate Regulations, had referred STA Nos.1176 and 1177/2000 for decision of the Full Bench, on the ground, that the legal issues involved in the appeals are of considerable importance and has ramification on all other similar matters pending before the Tribunal. The bench also had framed the following issues for consideration of the Full Bench. They are: ?1. Whether the polished tiles obtained out of rough granite blocks should be reckoned as the same goods or commercially new commodity for allowing exemption from Central Sales Tax law as contemplated under Section 5(3) of the CST Act, 1956? 2. Whether under that facts and circumstances of the case of the appellant, the ratio of the decision of the Hon?ble High Court of Karnataka in the case of Foredge Granite Vs. State of Karnataka (STA.No.1264/1989 dated 27.9.1990) is applicable??

(3.) THE relevant facts are, that the assessee is a proprietary concern and a dealer registered both under the provisions of the Karnataka Sales Tax Act, 1957 (?KST Act? for short) an Central Sales Tax Act, 1956 (?CST Act? for short). THE assessee for the assessment year 1993-1994 had sold 40 Perediso quality granite blocks with a total value of 59.073 cubic meters to M/s Inlac Granites Stones Ltd. Bangalore, for a value of Rs.3,78,511.00 for the purpose of export of cut and polished granite tiles in their 100% export oriented unit located Kundumaranahalli village, Dharmapuri District, Tamil Nadu. For the assessment year 1994-1995, the assessee had sold 40 Perediso quality granite blocks with a total value of 59.073 cubic meters the M/s. Inlac Granite Stones Ltd. Bangalore, for a value of Rs.5,81,805.00 for the purpose of export of cut and polished granite tiles in their 100% export oriented unit located at Kundumaranahalli village, Dharmapuri District, Tamil Nadu. In respect of export sales, the assessee had filed ?H? forms, the purchase order placed by M/s Inlac Granite Stones Ltd. Bangalore, and bill of lading of the exporter against the supplied effected by the assessee and had claimed exemption on the entire turnover in the return of turnover filed for both the assessment years. THE assessing authority after examining the returns so filed, had rejected the claim of the assessee for exemption from tax and had held, that the sale of granite blocks constituted sales in the course of inter-state trade or commerce, liable to tax under CST Act, 1956. According to the assessing officer, the granite blocks sold by the assessee was different from granite tiles exported to foreign countries by M/s Inlac Granite Stones Ltd., Bangalore, and since the sales were not supported by ?C? forms, the assessing officer had passed assessment order under Section 9(3) of the CST Act, 1956, for the assessment year 1993-1994, assessing taxable turnover at Rs.3,78,511.00 at 15% and for the assessment year 1994-1995 assessed the taxable turnover at Rs.5,81,805.00 at 10%.