DEPUTY COMMISSIONER OF SALES TAX LAW BOARD OF REVENUE TAXES ERNAKULAM Vs. UNITED COFFEE SUPPLY CO LTD

JUDGEMENT

(1.) The Deputy Commissioner of Sales Tax (Law), Board of Revenue (Taxes), Ernakulam is the revision petitioner in all these cases, which arise out of assessments to sales tax made against the respondent company for the years 1969-70 to 1974-75 (inclusive). These cases may be conveniently divided into two groups on the basis of certain distinctive features relating to the course of action adopted by the assessing authority and the first and second appellate authorities in relation to the assessments for those years. The first group consists of T. R. C. Nos. 135/1979, 136/1979 and 141/1979, which respectively relate to the assessment years 1969-70, 1971-72 and 1970-71. The second group consists of T. R. C. Nos. 160/1979, 166/1979 and 169/1979 which relate to the assessment years 1972-73, 1974-75 and 1973-74 respectively.

(2.) The assessee - The United Coffee Supply Co. Ltd., Palghat - is a dealer in raw coffee beans, roasted coffee beans, pure coffee powder, french coffee etc. According to the assessee, the company had effected purchases of raw coffee beans in the State of Kerala, despatched these goods to its factory at Coimbatore, where it was processed, and converted it into different varieties, such as roasted beans pure coffee, and french coffee. The question arising before us concerns the exigibility to tax of the turnover pertaining to the sales effected by the assessee of the aforesaid products which are said to have been received by him from the factory at Coimbatore and sold from its depot in Palaghat.

(3.) In the proceedings for assessment to sales tax under the Kerala General Satestax Act (hereinafter called the Act) taken against the assessee by the sales tax officer, Palghat for the years 1969-70 to 1971-72 (covered by the first group), the assessee claimed exemption from tax in respect of the entirety of the turnover relating to the sale of the aforementioned products on the basis that the goods in question had already been subjected to tax in the State of Kerala at the stage of purchase of the raw coffee beans by the assessee. In putting forward this contention the underlying assumption was two fold, namely that the products received back by the assessee from its factory at Coimbatore could be traced to the raw coffee beans purchased by the assessee in the State of Kerala and despatched to Coimbatore for processing, and secondly that the varieties of the products so received all fell within the description "coffee" contained in Item 37 of Schedule I to the Act. In other words, according to the assessee, the commercial identity of the article had not undergone any change notwithstanding its having been subjected to some mode of processing at the factory in Coimbatore and it had retained its original character as coffee. Admittedly, the disputed turnover relates to sales effected by the assessee from its depot at Palghat of "french coffee" which is an admixture of pure coffee and chicory, the proportion being 55% pure coffee and 45% chicory. The assessee Company has no case that it had effected any purchase of chicory in the State of Kerala so as to contend that tax had been paid in respect of the chicory portion contained in the french coffee.