RELIANCE TRADING COMPANY Vs. STATE OF KERALA

JUDGEMENT

(1.) As these revision applications under S.41. of the Kerala General Sales Tax Act, 1963 (in short 'the Act') raise a common question, they are taken up together and shall be governed by this judgment.

(2.) Question relates to taxability of tarpaulin. In each case, Judgment of Kerala Sales Tax Appellate Tribunal of different benches (hereinafter referred to as 'Tribunal' for sake of convenience) is assailed. Though assessment orders are relatable to different assessment years, there is practically no difference so far as position in law to be decided is concerned. Assessment years concerned in different cases are 1986-87 to 1993-94. According to assessee, tarpaulin is encompassed by the expression "cotton fabrics" falling under item No. 7 (upto 31st March 1,992) and item No. 11 (from 1st April 1992) of Schedule III to the Act and, therefore, exempted from tax. Alternatively, it is submitted that tarpaulin being one of the goods of special importance (declared goods), levy of tax thereon and at the rate prescribed cannot be maintained. Revenue's stand, on the other hand, is that tarpaulin is liable to be taxed as unclassified item at multi point upto 1983-84, and thereafter as an item classified under the First Schedule at first point inside the State. From 1st July 1987 to 31st March 1992, it was covered by item No. 152 and from 1st April 1992, it is covered by item No. 106.

(3.) The only question that, therefore, needs adjudication is whether sale of tarpaulin is exigible to tax. For answering this question, it would be proper to take note of legislative history of a few items in the Schedules I and III. There was no specific entry for tarpaulin till 31st March 1984. It was classified as a separate item under item No. 100C of the Schedule I, taxable 8 per cent at point of first sale in the State with effect from 1st April 1984. Said position continued till 30th June 1987. Item was re-numbered 152 with effect from 1st July, 1987 and read as "PVC cloth, water-proof cloth, rexin and their products and tarpaulin". Rate continued to be 8 per cent at the point of first sale. This item continued till 31st July 1991. 'PVC cloth' was omitted therefrom by Kerala Finance Act, 1991 (in short '1991 Act') with effect from 1st August 1991. No change in any other item, rate, point of levy was made. This was the position till 31st March 1992 as amended by Kerala Finance Act, 1992 (in short '1992 Act'). The new item No. 106 reads as "Rain coat, tarpaulin and products of water proof cloth, rexine and PVC cloth". Rate of tax has been increased to 1.0 per cent, with no change in the point of levy. According to Revenue, tarpaulin falls under item Nos. 100C or 152, as the case may be, taxable at 8 per cent at the first point of sale in the State from 1st April 1984 to 31st March 1992. It falls under item No. 106 with effect from 1st April 1992 taxable at the rate of 10 per cent at the point of first sale in the State. So far as the periods prior to 1st April 1984 are concerned it is to be noted that there was no specific Entry for tarpaulin in the Schedules to the Act. Exemption is claimed by assessee on the ground that tarpaulin is encompassed by expression "cotton fabrics" coming under item No. 7 of Schedule III to the Act.