Y JANARDHANA RAO Vs. STATE OF KERALA

JUDGEMENT

(1.) THE petitioner herein is an assessee under the Kerala General Sales Tax Act (in short, "the Act" ). He is a hotelier. We are concerned with the assessment gear 1978-79. THE controversy is relating to the taxable turnover of Rs. 76,840. THE assessee had a recalcitrant tenant, one Vaidyanatha Iyer, who was a dealer in automobile parts. In order to purchase peace, the entire stock-in-trade in automobile parts was purchased by the assessee for Rs. 97,573. 63, on 1st June, 1978. That enabled the petitioner-assessee to get possession of the premises. THE assessee returned a turnover of Rs. 36,000. He sold the entire goods to M/s. Surendra Automobiles. This aspect was verified by the appellate authority and it is agreed that the entire goods obtained from Vaidyanatha Iyer was sold to Surendra Automobiles. THE goods sold were out-modelled. THE assessee pleaded that he is not a dealer in automobile spare parts and so he should not be assessed on the turnover of Rs. 36,000 for which amount the entire goods obtained from Vaidyanatha Iyer were parted with. This plea was rejected by the assessing authority and in appeal the Appellate Assistant Commissioner accepted the plea of the assessee that he is not a dealer in automobile parts and since the assessee could not keep the goods for a long time, he sold it for the price obtained by him. Aggrieved by this order of the Appellate Assistant Commissioner, the Revenue filed an appeal before the Sales Tax Appellate Tribunal. THE assessee filed a cross objection and pleaded that he is not a dealer and so he is not liable to be assessed. THE Appellate Tribunal found that the entire goods obtained by the petitioner (assessee) was sold to Surendra Automobiles. THE Tribunal also held that the goods are out-modelled and the assessee, admittedly, is not a regular dealer in motor parts. In the absence of any clear evidence, it was held by the Appellate Tribunal that it cannot be said that the Appellate Assistant Commissioner erred in having reduced the turnover to Rs. 36,000. THE appeal filed by the State was dismissed. But surprisingly the Tribunal has not stated anything about the cross appeal filed by the assessee. Though advertence to the cross objection is casually made during the course of passing the order, the matter is not adjudicated by the Appellate Tribunal. This is a clear legal error. We should say that the Appellate Tribunal abdicated its duty in not adjudicating the plea raised ill the cross objections, that the assessee is not a dealer.

(2.) COUNSEL for the assessee (revision petitioner) submitted that on the findings entered by the authorities below, it is self-evident that the assessee is not a dealer in automobile spare parts. On the other hand, counsel for the Revenue laid stress on the decision in Burmah Shell Oil Storage and Distributing Co. of India Ltd. case [1973] 31 STC 426 (SC) and contended that though the assessee is only a hotelier, in the matter of disposal of the automobile parts, he should be considered to be a dealer within the meaning of the extended definition. The petitioner himself filed an application for registration as a dealer. That will show that he wanted to deal in the goods. We are of the view that the sale of the automobile parts by the assessee was merely an isolated transaction, which has nothing to do with the business carried on by the assessee. The automobile parts were obtained by him in settling his accounts with one Vaidyanatha Iyer. It cannot admit of any doubt that if Vaidyanatha Iyer had sold the entire goods, he would have got exemption under rule 9 (g) of the Kerala General Sales Tax Rules. It is not possible, on the basis of the materials now before us, to say that the petitioner (assessee) was a dealer or that he was doing the business in automobile parts, when he sold the entirety of the automobile parts, obtained from Vaidyanatha Iyer, to M/s. Surendra Automobiles. We declare that the assessment of the said sum by the assessing authority is unjustified and illegal. The assessment, if any, made, will stand modified to that extent. Petition allowed. .