SEASON RUBBERS Vs. STATE OF KERALA

JUDGEMENT

(1.) The order of the Court was delivered by the Subramonian Poti, Ag. C. J. -- A novel and interesting question arises in these cases. A Division Bench of this Court in the judgment in T.R.C. No. 88 of 1977 has spoken on this, but since another Division Bench of this Court doubted the correctness of that view these cases have been referred to a Full Bench. That is how the cases are now before us.

(2.) Under the scheme of the Sales Tax Act single point tax is leviable under sub-s.(1) or sub-s.(2) of S.5 of the Act in respect of certain goods. The First Schedule to the Act specifies these goods, the point of levy and the rate of tax. Some items of goods are taxable at the last point of purchase in the State. The rate of tax prevalent at the time of purchase may not be the rate of tax at the time the goods are disposed of later, which disposal gives the character of last purchase to the purchase made earlier. If the rate of tax prevalent at the time of such disposal is different from the rate of tax prevailing at the date of purchase at what rate should tax be levied If there is no change of rate of tax in the meanwhile this question may not arise. But if there is, one or other of the two rates will have to be applied. The Sales Tax Department has taken the stand that the rate to be applied is the rate prevailing at the time the purchase qualifies to be the last purchase by reason of the subsequent event which gives the earlier purchase the character of last purchase. The goods purchased may be sold inside the State again and if that happens the earlier purchase will not be the last purchase in the State. If the goods become unavailable by being consumed either in manufacture or otherwise or if the goods are exported outside the State, or if the goods are destroyed the earlier purchase becomes the last purchase in the State. According to the assessee tax being on the purchase despite the fact that the purchase attains the character of last purchase later it is the rate prevalent at the time of purchase that would be relevant. This stand taken by the assessees has not been accepted by the assessing authority, the Appellate Assistant Commissioner or the Appellate Tribunal. Hence these Revisions at the instance of the assessees.

(3.) The revision petitioner in T.R.C. No. 68 of 1980 is a dealer in rubber taxable at the last purchase point in the State by a dealer who is liable to tax under S.5 of the Act during the year 1974-75 which is the year with which we are concerned in this revision. The rate of tax at such single point upto 30th June 1974 was 3 per cent and it was enhanced to 5 per cent from 1st July 1974. The dispute between the assessee and the Sales Tax Department concerned the turnover of rubber purchased till 30th June 1974. Such rubber was sold in July 1974 and later. The rate of tax then was 5 per cent. Rubber purchased prior to 1st July 1974 was sought to be taxed at 5 per cent since according to the department such purchases had become last purchases only subsequent to 30th June 1974.