DEPUTY COMMISSIONER ERNAKULAM Vs. P V VARGHESE

JUDGEMENT

(1.) THESE three tax revision cases arise out of assessment to sales tax under the Kerala General Sales Tax Act (for short the Act), made against the same assessee for the years 1971-72 and 1972-73. The State is the revision petitioner in T. R. C. Nos. 161 and 162 of 1979 which relate respectively to the years 1971-72 and 1972-73. T. R. C. No. 175 of 1979 has been filed by the assessee and that relates to the year 1972-73.

(2.) THE assessee is carrying on business in jewellery at Chengannur. It is said that he purchases old gold ornaments, melts them, manufactures new ornaments and sells them. THE purchase turnover of the old gold ornaments was brought to tax under section 5a of the Act and assessed at the general rate for all the three years aforementioned by the assessing authority. THE assessing authority found that the accounts of the assessee could not he relied upon for the reasons stated by him in the orders of assessment and accordingly he rejected those accounts and estimated the taxable turnover of the assessee for the three years to the best of his judgment. THE process adopted by the assessing authority was to estimate the taxable turnover by taking it as three times the running stock for each concerned year. Appeals were filed by the assessee before the concerned Appellate Assistant Commissioner of Sales Tax. THE Appellate Assistant Commissioner confirmed the rejection of the accounts but substantially modified the estimated taxable turnover determined by the assessing authority by fixing it at 1 1/2 times the running stock in respect of each year. THE assessee had reiterated before the first appellate authority a contention which he had unsuccessfully put forward before the Sales Tax Officer that the turnover relating to the purchase of old gold ornaments was taxable only at 1 per cent since it came within the scope of item No. 50 of the First Schedule to the Act, namely, "bullion and specie". This contention was rejected by the Appellate Assistant Commissioner.

(3.) IN the revision petitions filed by the State (T. R. C. Nos. 161 and 162) the only point taken before us is that the Tribunal was wrong in holding that the turnover relating to the purchase of old gold ornaments fell within the scope of item No. 56 of the First Schedule to the Act and was hence taxable only at the concessional rate of 1 per cent. The learned Government Pleader submitted before us that the decision of this Court in Deputy Commissioner of Sales Tax v. G. S. Pai & Co. ([1978] 41 S. T. C. 440.) which has been relied on by the Tribunal has been subsequently reversed by the Supreme Court in Deputy Commissioner of Sales Tax v. G. S. Pai & Co. ([1980] 45 S. T. C. 58 (S. C. ).), wherein it has been held that purchase of old gold ornaments and other articles of gold for melting them and making new ornaments or other articles will not constitute purchase of bullion and specie within the meaning of item No. 56 of the First Schedule to the Act. The counsel appearing for the assessee frankly stated before us that in view of the decision of the Supreme Court referred to above it is no longer possible for him to support the view taken by the Tribunal that the turnover relating to the purchase of old gold ornaments is not taxable at the general rate but only at the concessional rate of 1 per cent under item No. 56 of the First Schedule. Accordingly, T. R. C. Nos. 161 and 162 of 1979 filed by the State have to he allowed.