LAWS(KER)-1991-8-8

ABDUL NAZAR Vs. SALES TAX OFFICER

Decided On August 07, 1991
ABDUL NAZAR Appellant
V/S
SALES TAX OFFICER Respondents

JUDGEMENT

(1.) WHEN C. M. P. ll216/1991 came up for orders, I heard counsel appearing on either side in detail. I am disposing of the Original petition.

(2.) PETITIONER is an assessee to tax under the K. G. S. T. Act, hereinafter referred to as the Act. He carries on the business of running hotels. His hotel, it is stated, is neither a bar attached hotel or hotel above the grade of two stars. It is therefore argued that the cooked food and beverages sold in his hotel are not to be brought under the taxing net. While assessing the petitioner for the year 1987-88 on best of judgment basis, the authority proposed to assess under S. SA of the K. G. S. T. Act. After over-ruling the objections raised by the petitioner, first respondent completed the assessment by Ext. P1 order fixing the total taxable turnover at Rs. 16,63,940/ -. Rs. 13 ,53,531 /- was fixed as turnover taxable under S. SA of the Act. The total tax, Additional tax and surcharge payable on the purchase turnover of Rs. 15 ,53,531 /-comes to Rs. 90. 642/ -. Once the turnover alleged to be exigible to tax under s. SA and the tax computed thereon is deleted, it is stated, the tax liability will be Rs. 33,383/- only. He challenges Ext. P1 order in so far as it imposes tax liability on the turnover found exigible under S. 5-A of the Act.

(3.) FOR a proper understanding of S. SA, I read clause (1)of that Section:- "every dealer who, in the course of his business, purchases from a registered dealer or from any other person any goods, the sale or purchase of which is liable to tax under this Act, in circumstances in which no tax is payable under sub-sections (1), (2), (3), (4) or (5) of S. S, and either,- (a) consumes such goods in the manufacture of other goods for sale or otherwise; or (b) uses or disposes of such goods in any manner other than by way of sale in the State; or (c) dispatches them to any place outside the State except as a direct result of sale or purchase in the course of inter-state trade or commerce; shall, whatever be the quantum of the turnover relating to such purchase for a year, pay tax on the taxable turnover relating to such purchase for the year at the rates mentioned in S. 5". FOR this clause to come into operation the following ingredients are to be satisfied. A dealer in the course of his business should purchase from a registered dealer or from any other person any goods, sale or purchase of which is liable to tax. The circumstances of such sale or purchase is such that no tax is payable under sub-sections (1) to (5) of S. 5 of the Act. Purchaser should either consume such goods in the manufacture of other goods for sale or otherwise or use or dispose of such goods in any manner other than by way of sale in the state or despatch them to any place outside the state except as a direct result of sale or purchase in the course of interstate trade or commerce. Then the dealer shall, whatever be the quantum of the turnover relating to such purchase for a year, pay tax on the taxable turnover relating to such purchase for the year at the rates mentioned in S. S. Clause 2 of S. SA further states that a dealer purchasing goods, the sale of which is liable to tax under S. 5 shall not be liable to pay tax under clause (1) if his total turnover for a year is less than one lakh rupees. This has a proviso. In this case that has no application. S. 16 (1) of the KLG. S. T. Act states that tax under the Act shall be assessed, levied and collected in such manner as may be prescribed. Prescription can only be by Rules. Rule 16 deals with the manner in which annual return and final assessment are to be made. Clause (1) of Rule 18 enjoins every dealer liable to pay tax under the act, whose total turnover for the year is not less than the minimum specified in S. 5 or S. SA to file return in FORm 8 showing the total turnover and taxable turnover. This provision makes it clear that an assessee has to file returns giving the turnover falling under S. SA of the Act. When such a return is filed, the assessing authority has to proceed with the assessment on the basis of that return as provided thereunder. Clause (4) of that Rule states that on receipt of a return in FORm 8 the assessing authority shall finally assess on the basis of the return the tax or taxes payable under S. 5 or notified under S. 10 for the year to which the return relates. The taxable turnover under S. SA is to be taxed at the rates mentioned in S. S. This shows that there is no separate procedure prescribed for assessing a dealer under S. SA of the K. G. S. T. Act. The same procedure and method of assessment falling under S. 5 is to be resorted to cases under S. SA as well. According to the learned counsel representing the petitioner, Clause (4) mentions only S. 5 and not S. SA and so, no assessment can be made. This argument is preposterous. Clause l) of S. SA specifically states that whatever be the quantum of the turnover relating to the purchases mentioned in sub-clauses (a) to (c) of that clause, the dealer should pay tax on the taxable turnover relating to the purchase for the year at the rates mentioned in S. S. So the returns filed under S. 5a is to be dealt with and tax assessed at the rates mentioned in S. S. Hence the argument that non-mention of S. SA in Clause (4) of Rule 18 will make S. SA inoperative is only to be stated to be rejected. There is no need to have separate or additional rules to be framed for assessing a dealer under S. SA of the K. G. S. T. Act.