VASUDEVA PAI Vs. STATE OF KERALA

JUDGEMENT

(1.) These three Tax Revision Cases arise, out of a common judgment of the Kerala Sales Tax Appellate Tribunal, Trivandrum and they raise the same question of interpretation of sub-s.(vii) of S.5 of the Madras General Sales Tax Act, 1939. The petitioners have been assessed to sales tax for the year 1955-56 and the main question for decision in these cases is whether the sales of beedies by the petitioners in the Malabar area within the Madras State during the year were liable to tax under S.5 (vii). The revision petitioners purchased the beedies from manufacturers in the Malabar area, whose turnovers in the year were less than Rs. 10,000/- and sold them later and the question, as we have already observed, is the liability to tax or otherwise of the petitioners on these subsequent sales. Sub-s.(vii) of S.5, omitting the words not essential for the purposes of the present cases, reads:

(2.) An analysis of the sub-section extracted above reveals that three ingredients are necessary to attract the provisions thereof to any sale. They are, firstly, that the sale should take place within the State of Madras, secondly, that the sale should be by a dealer who is not exempted from taxation under S.3(3) of the Act, i. e , it should be by a dealer whose turnover is not less that Rs. 10,000/- and lastly, that the sale should be the first of such sales. There cannot be several sales of the same commodity by the same dealer but there can be a series of sales of the same commodity by several dealers within the State of Madras. Some of these sales might be by dealers exempted from tax under S.3 (3) by reason of their turnovers being less than Rs. 10,000/- and the others by dealers not thus exempted. Sub-s.(vii) of S.5 makes the first of the latter category of sales liable to tax and this has already been decided by us in another case, Sadhoo Beedi Depot, Beedi Merchants Cannanore v. The State of Kerala, T.R.C. No. 1 of 1958. In the cases before us the manufacturers from whom the petitioners purchased the beedies are exempted from taxation under S.3 (3), so that the subsequent sales by the petitioners are the first sales effected in the State of Madras by dealers not exempted under S.3, sub-section 3. Hence we hold against the petitioners on this point.

(3.) Another contention that has been urged before us is based on the definition of turnover in S.2 (5) of the Sales Tax Act. The relevant portion of this definition reads: