DY COMMR SALES TAX Vs. BALAKRISHNAN

JUDGEMENT

(1.) These are connected cases. The Revenue is the petitioner in this batch of seven cases. The respondent, in all the cases, is the same. The respondent is an assessee under the Kerala General Sales Tax Act. The matter relates to the assessment years 1976-77, 1977-78,1978-79,1979-80,1980-81,1981-82 and 1982-83. The assessee is a manufacturer of Wet Grinders. The purchase turnover on the items such as bearings, crown, belt, fireclay, drums, cables, hardware, paint, casting iron scrap etc., were brought to tax under S.5 A of the KGST Act holding that they were consumed in the process of manufacture of Wet Grinders. Admittedly, the said items were not taxed under S.5 of the Act. The assessments were upheld in first appeals. But, in the second appeals, filed by the assessee, the Sales Tax Appellate Tribunal, by a common order dated 25-7-1989, held that the purchase turnover relating to the said items cannot be taxed under S.5 A of the K.G.S.T. Act. The Appellate Tribunal held that the said items which are consumable stores cannot be said to be "consumed" in the manufacture of other goods since the language used in S.5-A of the Act is not "uses such goods in the manufacture of other goods". A direction was given to delete the amounts (the purchase price)of the said goods from the turnover determined under S.5 A of the Act. Thereafter, the Revenue has filed this batch of seven Tax Revision Cases assailing the common order passed by the Sales Tax Appellate Tribunal dated 25-7-1989.

(2.) We heard counsel for the Revenue, Special Government Pleader (Taxes), Mr. N. N. D. Pillai, as also counsel for the respondent/assessee Mr. O. Ramachandran Nambiar. Counsel for the Revenue submitted that the Appellate Tribunal was in error in holding that the purchase turnover of the items such as bearings, crown, belt, fireclay, drums, cables, hardware, paint, casting iron scrap etc., are not exigible to tax under S.5A of the Act. Counsel for the respondent/assessee submitted that the said goods were only used in the manufacture of other goods and there is no consumption as envisaged by S.5A(1)(a) of the Act to attract the levy of tax..

(3.) On hearing the rival contentions of the parties, we are of the view that the reasoning and conclusion of the Appellate Tribunal, holding that the items such as bearings, crown, belt, fireclay, drums, cables, hardware, paint, casting iron scrap etc., are not exigible to purchase tax under S.5A of the Act, is a clear error. Admittedly, the assessee is a manufacturer of Wet Grinders. The above items formed components of the end product - Wet Grinders. Is it possible to say that there is no consumption of the said goods in the manufacture of other goods for sale In our opinion, the answer should be in the negative.