THOMAS N P Vs. STATE OF KERALA

JUDGEMENT

(1.) This writ appeal is filed against the judgment of the learned single judge See page 24declining to interfere with appellant's challenge against the constitutional validity of section 17B of the Kerala General Sales Tax Act, 1963 (hereinafter called as "the Act", for short). We have heard learned counsel appearing for the appellant and learned Special Government Pleader appearing for the respondents, and have also gone through the judgment of the learned single judge See page 24 supra.

(2.) The appellant is a registered dealer under the Act engaged in purchase and sale of cement within the State. Cement was an item taxable at the point of first sale under the First Schedule to the Act. However, when the Finance Bill, 2004 was introduced, "cement" along with another 20 items were proposed to be shifted from the First Schedule to the Fifth Schedule to the Act, which provides for two-point levy of tax on the said commodities. By virtue of the notification issued along with the Finance Bill 2004, all dealers were bound to collect and remit tax based on the proposals contained in the Finance Bill. This would mean that from April 1, 2004 onwards first sellers of cement in Kerala were liable to collect and remit tax at 10 per cent and last sellers at the rate of five per cent on their sales. However, when the Finance Act, 2004, was passed and notified on July 27, 2004, the proposal to shift several items including cement from the First Schedule to the Fifth Schedule in terms of the Finance Bill was given up. In other words, cement and the other 20 items were retained in the First Schedule. Noticing the difficulty for those dealers who would have complied with the proposals contained in the Finance Bill, based on notification issued under the Kerala Provisional Collection of Revenues Act, 1985, the Government introduced section 17B to the Act through the Finance Act, 2005, which is as follows:

(3.) What is clear from the above provision is that registered dealers who have purchased several items stated in the above section including cement from April 1, 2004 to July 27, 2004 by paying tax at the rates shown in column (4) therein should pay tax on the resale of such goods as provided in column (6). Therefore, the intended purpose of section 17B is to give effect to tax proposal contained in the Finance Bill, 2004 until the Bill became operational, i.e., until the Finance Act, 2004 was passed and notified.