RADHAS PRINTERS Vs. STATE OF KERALA

JUDGEMENT

(1.) The assessee, manufacturer and seller of paper cartons and duplex boxes is the revision petitioner. On 16th August 1979 the petitioner supplied goods valued at Rs. 1,00,000 to M/s Vimala Packaging Industries which also deals in similar goods on consideration that the latter shall return the goods together with interest at 15 per cent per annum on Rs. 1,00,000. The goods, according to the revision petitioner were returned on 14th August 1980 together with interest Rs. 15,000. According to the petitioner since the same was a loan transaction it did not include the said amount of Rs. 1,00,000 as its taxable turnover in the turnover for the year 1979-80. The assessing authority as per Annexure A reckoned the said Rs. 1,00,000 also as taxable turnover holding inter alia that the provision for payment of interest on the amount of loan is inconsistent with the alleged loan transaction and levied sales tax on the said turnover. Petitioner preferred an appeal before the Assistant Commissioner who by Annexure B order dismissed the appeal. A further appeal was preferred before the Sales Tax Appellate Tribunal which ' also was dismissed by Annexure C. This revision is directed against the said order.

(2.) According to the petitioner the transaction in question since is not a 'sale' within the meaning of the Kerala General Sales Tax Act, 1963 (Act 16/1963) for short the K.G.S.T. Act the said amount is not exigible to sales tax. It was contended by the learned counsel for the revision petitioner, the view of the appellate authority that there was transfer of property in goods from the appellant to M/s Vimala Packaging Industries for valuable consideration in the form of deferred payment 'is not correct either on facts or law. It was maintained by the learned counsel that inasmuch as the goods were given as loan to a sister concern of the revision petitioner and the said goods were returned, the same as per law cannot amount to sale. According to the learned counsel, since the transaction is only loan the same cannot be sale for the purpose of the Act; consequently the said amount could not have been treated as taxable turnover as has been done by the authorities.

(3.) On the other hand, the learned Government Pleader for the respondent revenue maintained that the loan transaction is a make believe one, the provision for payment of interest is totally inconsistent, with a case of exchange or barter, and with due regard to the fact that the value of the goods in question was reckoned and since admittedly interest was charged on the said amount and was paid and received, the assessee cannot maintain that the transaction was only a loan and not a sale within the meaning of the K.G.S.T. Act.