JYOTHISH KUMAR Vs. STATE OF KERALA

JUDGEMENT

(1.) APPELLANTS challenge the amendment to sub-sections (14)and (17) of S. 7 of the Kerala General Sales Tax Act, 1963 (for short 'the Act')by the Kerala Finance Act 13 of 1993, as also to S. 5 (1) (v) read with Item 1 of the Fifth Schedule to the said Act as arbitrary, oppressive, confiscatory and unreasonable.

(2.) APPELLANTS are the successful bidders at the Abkari auctions held during 15-3-1993 and 17-3-1993 of the right to vend arrack in retail in various Excise Ranges in the State during 1993-1994. They have executed agreements prescribed by the Kerala Abkari shops (Disposal in auction) Rules, 1974 and have paid the rental (kist ). APPELLANTS contend that they are not liable to pay the tax under the new Abkari policy.

(3.) AS a result of the new Abkari policy, State monopoly on the supply of arrack was abandoned and the contractors were permitted to import designated quantities or rectified spirit from other States for conversion into arrack or procure the supply from the distilleries in the state, preference being given for local supply. Rule 8 of the Disposal in auction Rules was amended to carry out the policy on 4-3-1993 and also on 31-3-1993. AS a result of the policy, the contractors became liable to pay tax at 62. 5% under the last column to Item 1 of the Fifth schedule on their retail sales of arrack in cases where the rectified spirit was imported from outside, as they became the first and last seller in respect thereof.