KALLANGODAN SPICES Vs. ADDITIONAL SALES TAX OFFICER

JUDGEMENT

(1.) THIS batch of 56 writ appeals are preferred against the ommon judgment of Viswanatha Iyer, J. , dated April 7, 1993 [reported as Gangadharan v. Additional Sales Tax Officer [1993] 91 STC 80 (Ker ). ], rendered in O. P. No. 10342 of 1992 and connected cases. All the appellants are assessees under the Kerala General Sales Tax Act, 1963. They are dealers in rubber, garbled or ungarbled pepper, arecanut, dried ginger etc. The grievances highlighted by the appellants/assessees are substantially similar. The appellants have highlighted the manner or method by which the turnover tax under section 5 (2a) of the Kerala General Sales Tax Act, 1963, is given effect to or implemented. The Kerala Finance Act (18 of 1987) introduced sub-section (2a) in section 5 of the Kerala General Sales Tax Act. Sub-section (2a) provided for the levy of turnover tax on the turnover of goods as specified therein-at the rate of half per cent on the turnover of goods coming under the First or Fifth Schedule to the Act. Tax is levied on all dealers whose turnover exceeded rupees twenty-five lakhs in a year. It is payable by all dealers. It is subjected to annual amendments and exemptions or reductions promulgated in the notification issued under section 10 of the Act. The relevant notifications dealing with exemption in respect of turnover tax payable under section 5 (2a) of the Act are S. R. O. Nos. 715, 716 and 717 of 1988 which were relied on by the assessees in support of their pleas. S. R. O. Nos. 715 and 716 of 1988 dealt with turnover of rubber and S. R. O. No. 717 of 1988 dealt with the turnover relating to pepper, arecanut, ginger, etc. S. R. O. No. 715 of 1988 came into force from July 1, 1987 and was valid till February 18, 1988. S. R. O. No. 716 of 1988 came into force of February 19, 1988, and S. R. O. No. 717 of 1988 came into force with effect from July 1, 1987.

(2.) BRIEFLY stated, the aforesaid three notifications promulgated under section 10 of the Act, made an exemption in respect of turnover tax payable by dealers under section 5 (2a) of the Act on the turnover of goods specified therein, in respect of all points of purchase except the penultimate purchase point, viz. , purchase point immediately preceding the last purchase point in the State or at the point of purchase preceding the purchase in the course of export or at the point of purchase previous to the last purchase in the State which is not exempted from turnover tax. The notification was subject to the condition that the dealer who claims exemption on such turnover tax shall produce before the assessing authority concerned a declaration in the form annexed to the notification from the dealer who had paid the turnover tax.

(3.) IT will be useful to quote section 5 (2a) of the Kerala General Sales Tax Act and one of the notifications (all of them are more or less similar), in order to understand the scope of the controversy raised in the writ appeals. " 5. Levy of tax on sale or purchase of goods. -. . . . . . . (2 ). . . . . . . . . . (2a) (i) Notwithstanding anything contained in this Act or the Rules made thereunder every dealer other than an oil company defined in the Explanation under serial number 140 of the First Schedule to this Act, whose total turnover in a year exceeds rupees twenty-five lakhs shall pay turnover tax at the rate of half per centum on the turnover of goods coming under the First or Fifth Schedule to this Act and in the case of an oil company whose total turnover in a year is rupees fifty lakhs and above shall pay turnover tax at the rate of one per centum, on the turnover : Provided that no tax under this sub-section shall be payable on that part of such turnover, - (i) on which tax is leviable under sub-section (1) of sub-section (2), on such dealer other than an oil company referred to above, except in the case of rubber excluding synthetic rubber, tea, pepper, arecanut and dried ginger; (ii) which relates to : (a) sale or purchase of goods in the course of inter-State trade or commerce; (b) sale or purchase of goods in the course of export out of the territory of India or sale or purchase in the course of import into the territory of India; (c) sale or purchase exempted from tax by notification under section 10; (d) all amounts falling under the head 'freight', when specified and charged for by the dealer separately without including such amounts in the price of the goods sold; (e) all amounts falling under the head 'charges for delivery', when specified and charged for by the dealer separately without including such amounts in the price of the goods sold; (f) all amounts allowed as discount, provided that such discount is allowed in accordance with the regular practice of the dealer or is in accordance with the terms of a contract or agreement entered into in a particular case and provided also that the accounts show that the purchaser has paid only the sum originally charged less discount; (g) all amounts allowed to purchasers in respect of goods returned by them to the dealer when the goods are taxable on sales provided that the goods were returned within a period of three months from the date of delivery of the goods and the accounts show the date on which the goods were returned and the date on which and the amount for which refund was made; and (h) all amounts received from the sellers in respect of goods returned to them by the dealer, when the goods are taxable on the purchase value provided that the goods were returned within a period of three months from the date of delivery of the goods and the accounts show the date on which the goods were returned and the date on which and the amount for which refund was received : Provided further that save as otherwise provided in this sub-section, no other deduction shall be made from the total turnover of a dealer for the purposes of this sub-section. (ii) The provisions of this Act and the rules made thereunder shall, so far as may be, apply in relation to the assessment, collection or refund of the turnover tax under this sub-section including the provisions relating to appeals and penalties, as they apply in relation to the assessment, collection or refund of tax under the other provisions of this Act. (iii) Notwithstanding anything contained in sub-section (1) of section 22, no dealer shall collect from his purchaser the turnover tax payable by him under this sub-section. " " S. R. O. No. 715/88.- In exercise of the powers conferred by section 10 of the Kerala General Sales Tax Act, 1963 (15 of 1963), the Government of Kerala, having considered it necessary in the public interest so to do, hereby make an exemption in respect of the turnover tax payable by dealers under sub-section (2a) of section 5 of the said Act, on the turnover of rubber at all points except the penultimate purchase point, viz. , purchase point immediately preceding the last purchase point excluding the purchase from the agriculturists whose total turnover exceeds, rupees fifty lakhs in a year subject to the condition that any dealer who claims exemption on such turnover tax shall produce before the assessing authority concerned a declaration in the form annexed to this notification from the dealer who had paid the turnover tax. This notification shall be deemed to have come into force with effect from July 1, 1987 and shall be deemed to have been valid till February 18, 1988. ANNEXURe Form of declaration to be furnished by a purchasing dealer for claiming exemption from turnover tax at other points. 1. I/we. . . . . . . . . . . . . . . (here enter the name and full postal address of the purchaser) dealer (s) in goods taxable at the point of purchase in the State, have purchased goods of the description given below from Shri/messrs. . . . . . . . . . . . . . [here enter the name and full postal address of the seller (s)]. 2. My/our turnover for the year is not less than rupees fifty lakhs and I/we have paid turnover tax on the turnover of goods mentioned below. 3. My/our registration certificate number is. . . . . . . . (here enter R. C. No. ). 4. I/we am/are registered dealer (s) on the rolls of the sales tax office. . . . . . . . . (here enter the name of the sales tax office) and I/we have filed our return for the month of. . . . . . . . . (here enter the month previous to which the purchase relates) along with proof of payment of turnover tax due for the goods which I/we am/are liable to pay. Particulars of goods purchased ------------------------------------------------------------------------ Sl. No. and Description Quantity Value Turnover Remarks No. date of of goods ------------- of goods tax due purchase No. of Weight purchased and paid bill packages issued by the purchaser ------------------------------------------------------------------------ (1) (2) (3) (4) (5) (6) (7) (8) ------------------------------------------------------------------------ ------------------------------------------------------------------------ Place : Name, signature and status of the persons signing the declaration. Date : Note.- (1) The declaration shall be filed in duplicate and shall be signed by the person who is authorised to sign return in form No. 9. (2) Any subsequent purchaser may furnish the declaration furnishing the details prescribed therein. [notification G. O. (P) No. 70/88/td dated June 13, 1988 in Kerala Gazetted Extraordinary No. 520 dated June 16, 1988. ]