MERCHANDISERS P LTD Vs. STATE OF KERALA

JUDGEMENT

(1.) A Division Bench of this Court after hearing T.R.C. No. 336 of 2000 referred the case for decision by a Full Bench as it felt that the questions raised by the petitioner are of such importance that it should be decided by a Full Bench. In fact the Tribunal decided the case based on a Division Bench decision of this Court in Deputy Commissioner v. A.V. George & Co. Ltd., T.R.C. No. 105 of 1998 reported in (2001) 9 KTR 107 the correctness of which was canvassed by the petitioner, which appears to be the reason why reference was made by the Division Bench. Since the questions raised in S.T.Rev. Nos.6 and 8 of 2004 are the same, as in T.R.C. No. 336 of 2000, those cases are clubbed together and posted for disposal along with the referred T.R.C. Eventhough several questions are raised in the T.R.Cs. there is only one issue to be decided which is petitioners eligibility for exemption from turnover tax on the purchase turnover of rubber effected as agents for outside-State principals.

(2.) Petitioners are acting as buying agents for purchase of rubber in Kerala for their principals located outside the State. Rubber purchased are despatched outside the State and the petitioners are getting reimbursement of purchase price, sales tax borne by them and other expenses incurred and along with it commission. According to petitioners since commission received by the petitioners is below 1.5 per cent petitioners are entitled to exemption from turnover tax on the purchase turnover of rubber in terms of Notification S.R.O. No. 1341/1987 dated 8.10.1987. The Tribunal following the reported decision of this Court above referred confirmed the disallowance of exemption on the ground that the collections by the petitioners which include reimbursement of sales tax, additional sales tax, surcharge, etc., exceeded 1.5 percent. It is this order of the Tribunal that is under challenge before us.

(3.) The questions raised are specifically against inclusion of sales tax, additional sales tax and surcharge along with commission and other charges based on which exemption was disallowed. According to the petitioners, the decision of this Court above referred based on which the Tribunal rejected the petitioners' claim as such calls for reconsideration. The notification based on which exemption is claimed by the petitioner is extracted hereunder for easy reference: