ASHISH KAPUR Vs. FOREST OFFICER

JUDGEMENT

(1.) These writ appeals raise a common point regarding the exigibility of sales tax under the Kerala General Sales Tax Act. The facts need not separately be stated as all the matters relate to levy of sales tax under the Kerala General Sales Tax Act, 1963 (hereinafter referred to as "the State Act"). The appellants filed the writ appeals aggrieved by the judgments rendered by the learned single Judge repelling their contention that they are not liable to pay the sales tax under the State Act, but are liable to pay tax only under the Central Sales Tax Act, 1956 (hereinafter referred to as "the Central Act"). All the appellants are said to be traders in sandalwood and having sale outlets in other States than Kerala, be it in Uttar Pradesh, Delhi or Haryana and had participated in the sandalwood auction conducted by the Kerala Forest Department in which they were the highest bidders. They were not permitted to take their bid properties unless the sales tax under State Act is remitted. Their contention is that they participated in the auction not to sell the sandalwood timber within the State of Kerala and their sole intention was to transport sandalwood to the respective destinations outside the State of Kerala and the said transactions attract only the provisions of the Central Act and not the State Act. Concisely speaking, their contention is that the transactions have to be treated as inter-State trade and not an intra-State within Kerala.

(2.) The learned single Judge went into the matter very comprehensively and did not agree with the contentions raised by the appellants that the transactions are inter-State. Learned counsel appearing for the appellants heavily relied upon the judgments rendered by the Supreme Court in Consolidated Coffee Ltd. v. Coffee Board, Bangalore , Co-operative Sugars (Chittur) Ltd. v. State of Tamil Nadu and State of A.P. v. National Thermal Power Corporation Ltd. . Mr. Raju Joseph, learned Special Government Pleader (Taxes), counters the arguments of the learned counsel for the appellants stating that the situs of the sale is within the State of Kerala and the sale was complete the moment bids of the appellants were accepted and the appellants' intention to carry the auction properties beyond the State of Kerala is immaterial and as the sale was completed within the State of Kerala, the State Act is applicable and that merely because the appellants wanted to carry the timber to their business places outside the State of Kerala cannot be a factor for treating the sale as inter-State.

(3.) Mr. Raju Joseph, the learned Government Pleader, has cited a Constitutional Bench decision of the Supreme Court in Kil Kotagiri Tea and Coffee Estates Co. Ltd. v. State of Kerala, [1965] 16 STC 467, which held that sale of goods in auctions is complete by the fall of the hammer under the Sale of Goods Act. In the said case, the question was whether the sale was completed within the area of Fort Cochin, which was hitherto in the State of Madras or Willington Island which was in the State of Travancore. Dealing with the question very comprehensively, it was ruled by the Supreme Court authoritatively that since the sale took place within the territorial jurisdiction of Fort Cochin, tax which is leviable by the State of Madras was payable. Learned counsel for the appellants seek to distinguish the ratio laid in the said judgment by relying upon the judgments cited in Consolidated Coffee's case , Co-operative Sugar's case and National Thermal Power Corporation's case .