TROPICAL FARMS Vs. STATE OF KERALA

JUDGEMENT

(1.) The issue raised in the connected revision cases relating to two assessees is whether the activities carried on in the poultry farm, i.e., buying one or two day old chicks, rearing the same into full grown chicken and sale of the same, entitles the farm to get the benefit of presumptive tax under section 6(5) of the Kerala Value Added Tax Act, 2003 (hereinafter referred to as "the Act", for short). We have heard learned counsel for the petitioners and learned Senior Government Pleader appearing for the respondent.

(2.) The petitioners are admittedly poultry farmers engaged in purchase of one or two day old chicks, rearing the chicks in the poultry farm under the strict control of air, temperature, standardised feeding and medication and sale of full grown birds as broiler chicken exclusively for its meat value for human consumption. Admittedly, chicken is taxable under the residuary entry under notification issued in 2006 under section 6(1)(d) of the Act taxable at 12.5 percent. When assessments were taken up for different periods of 2005-06 and 2006-07, the petitioners claimed benefit of presumptive tax at 0.5 percent of the turnover on the ground that annual turnover was below Rs. 50 lakhs. However, under section 6(5) those dealers engaged in first taxable sale of goods are not entitled to the benefit of concessional rule under the Scheme of payment of presumptive tax under the said section. The claim made by the petitioners before the assessing officer was that since one or two day old chicks are purchased locally, the sale of full grown birds after rearing should be treated as sale of the same commodity so that the petitioners cannot: be treated as first taxable sellers of chicken. The assessing officer rejected the claim stating that one or two day old chicks purchased by the petitioners completely loose the identity, character and use when it is sold after rearing for about 45 days in the farm as full grown birds sold by weight for meat purpose. The first appellate authority as well as the Tribunal completely agreed with the findings of the assessing officer that the chicks and the full grown birds are different commodities, and since the petitioners are first taxable sellers of full grown birds they are not entitled to the benefit of section 6(5) of the Act. It is against these orders of the Tribunal, the petitioners have approached this court with these revision petitions.

(3.) In order to consider the controversy we have to refer to the relevant provisions of the Act, which are extracted hereunder: