STATE OF KERALA Vs. SIRAJ TIMBERS

JUDGEMENT

(1.) THE matter arises under the Central Sales Tax Act, 1956 (for short, "the Act" ). State is the revision-petitioner. Assessee is the respondent. THE assessment year concerned is 1997-98. THE respondent-assessee is a dealer in timber. THE assessee had effected inter-State sales of timber to the tune of Rs. 13,45,929 unsupported by C form declarations. In the assessment for the year 1997-98 the assessing authority proposed to levy tax on the said transaction at the rate of 13. 75 per cent. According to the assessee the rate of tax on timber applicable to the inter-State transaction unsupported by C form is only 10 per cent since the tax under the Kerala General Sales Tax Act, 1963, is only 2. 5 per cent at the hands of the petitioner. However, this was not accepted by the assessing authority. He levied tax at 13. 75 per cent. In appeal filed by the assessee the first appellate authority held that the rate of tax applicable in the instant case is 12. 5 per cent as against 13. 75 per cent adopted by the assessing authority. In further appeal by the assessee the Sales Tax Appellate Tribunal accepted the contention of the assessee that since the rate of tax leviable on timber is only 2. 5 per cent plus surcharge the correct rate to be applied on inter-State sales turnover in the absence of C form is 10 per cent.

(2.) THE learned Government Pleader appearing for the petitioner-State contended that the sale of timber is liable to tax under section 5 read with entry No. 8 of the Fifth Schedule to the Kerala General Sales Tax Act, 1963 at 12. 5 per cent and therefore by virtue of the provisions of section 8 (2) (b) of the Act the inter-State transaction unsupported by C form is liable to tax at 12. 5 per cent. THE Government Pleader submitted that the first appellate authority has rightly held that the transaction in question is liable to be assessed at the rate of 12. 5 per cent and that the Tribunal had erroneously held that the rate of tax under the K. G. S. T. Act is only 2. 5 per cent and therefore the tax leviable under section 8 (2) (b) of the Act is only 10 per cent.

(3.) AS observed by the Supreme Court in Deputy Commissioner of Sales Tax v. Aysha Hosiery Factory (P.) Ltd. [1992] 85 STC 106 the rate of tax applicable to the intra-State sales at a particular point of time is a relevant consideration for finding out the rate of tax on inter-State sale and that it is still the Central Act that is applied but only for the purposes of fixing the rate leviable under the Central Sales Tax Act the provisions of the local Act are looked into. The aforesaid decision of the Supreme Court is also an authority for the proposition that sales tax law of the State takes in the Kerala Surcharge on Taxes Act, 1957 also. In the instant case the State has not canvassed for the same is evidenced from the fact that the State did not file any appeal against the order of the first appellate authority holding that the rate of tax applicable is only 12. 5 per cent and not 13. 5 per cent.