STATE OF KERALA Vs. P MOHAMMED

JUDGEMENT

(1.) The following is the question of law raised for consideration in this revision :

(2.) The assessee is a manufacturer and dealer in gunny bags. He filed valid form 18 declaration supplied by the buyer, viz., M/s. Koyemco Solvent Extraction, Calicut, who purchased the said gunny bags for packing cattle feeds produced by them. The Additional Income-tax Officer found that since the respondent/assessee has sold gunny bags against form 18 declarations to a dealer in cattle feed, which was exempted from payment of tax for the period from April 1, 1989 to March 31, 1991 by virtue of the notification granting exemption, he is not entitled to the concessional rate of tax. It was held that under Section 5(3) of the Kerala General Sales Tax Act, 1963, the respondent/assessee is not entitled to the benefit of concessional rate of tax based on the form 18 declaration issued by the buyer. Hence the return was rejected and assessment was completed disallowing the claim of concessional rate of tax based on form 18 declarations. The appellate authority, namely, Appellate Assistant Commissioner of Sales Tax, confirmed the said view. However, on further appeal, the Tribunal held, following an earlier Full Bench decision of the Tribunal that the expression "goods liable to tax" and "exempted goods" are distinct and different and gunny bags sold for packing exempted cattle feed are also entitled for the reduced rate of tax. At the instance of the department, this tax revision case is filed raising the above question.

(3.) Section 5(3) of the Kerala General Sales Tax Act reads as follows :