GANAPATHY IYER Vs. STATE OF KERALA

JUDGEMENT

(1.) These three tax revision cases filed by the assessee arise out of the orders of the Sales Tax Appellate Tribunal for the assessment years 1995-96, 1996-97 and 1997-98. Even though the assessee has raised three common questions for all the assessment years, we feel in substance there is only one issue to be decided and therefore we consolidate and redraft the question to be decided as follows:

(2.) We have heard counsel appearing for the petitioner and Government Pleader appearing for the respondents. On going through the orders of the Tribunal we find that the second appeals filed by the assessee on the above question were rejected by the Tribunal following the decision of the Supreme Court in State of Karnataka v. B.M. Ashraff & Co., 107 STC 571. However, the assessee's counsel submitted that the decision relied on by the Tribunal was with reference to Section 6 of the Karnataka Sales Tax Act and the transactions with reference to which the decision was rendered by the Supreme Court were local purchase and local sales in Karnataka itself, while sales effected by the assessee after purchase from unregistered dealers were to exporters outside Kerala which are interstate sales. He has also relied on the decision of this Court in Deputy Commissioner v. Smt. Alekutty Pappali, 1993 (1) KTR 509, and the unreported decision in K.P. Nishad v. Sales Tax Officer and Ors. in TRC 386/2004 dated 24.11.2004 whereunder this Court held that dealers who purchased goods from unregistered dealers and sold to exporters are not liable to pay purchase tax under Section 5A of the KGST Act. Government Pleader on the other hand contended that Section 6 of the Karnataka Sales Tax Act and Section 5A of the KGST Act are pari materia same and the decision of the Supreme Court is squarely applicable to the facts of this case and the Tribunal rightly followed the same and rejected the petitioner's appeals. According to him, the first decision of this Court referred to by the assessees is much before the decision of the Supreme Court rendered in 1997 and therefore, the decision of this Court is no longer good law. So far as the unreported decision relied on by the petitioner is concerned, the Government Pleader pointed out that the said decision is rendered without referring to the Supreme Court decision and in view of the binding nature of the decision of the Supreme Court under Art. 141 of the Constitution of India, this Court has to follow the same and reject the revisions filed by the assessee. If the decisions of this Court are not consistent with the law declared by the Supreme Court, then we cannot follow such decisions of this Court for the sake of inconsistency as we are bound by law laid down by the Supreme Court.

(3.) The contention of the assessee's counsel is that when goods purchased from unregistered dealers are sold locally or interstate, then such purchases will not attract purchase tax by virtue of Section 5A(1)(b) and (c). In order to appreciate the position, we have to refer to Section 5A which is extracted hereunder: