C.M.FAIZAL Vs. STATE OF KERALA

JUDGEMENT

(1.) Petitioners in the connected Sales Tax Revisions were dealers in Coffee, engaged in purchase and sale of coffee beans during 1998-99. Before the introduction of finance bill 1998, coffee beans was taxable at the point of first purchase in the State. However, in the finance bill introduced for the financial year 1998-99, the point of levy of sales tax on coffee beans purchased within the State was proposed to be changed from the point of first purchase to the point of last purchase in the State. Along with the finance bill declaration was also issued by the Government under Section 4 of Provisional Collection of Revenue Act 1985. Consequent upon the declaration published along with the finance bill the provisions of the bill came into force from first April 1998.

(2.) Therefore, by virtue of the change in the incidence of tax from the point of first purchase to the point of last purchase, petitioners were not liable for payment of sales tax on first purchase of coffee beans within the State. According to the petitioners, turn over of first purchase of coffee was claimed exempt in the monthly returns filed for the months of April to July, 1998. The petitioners case is that the coffee purchased by them within the State were sold to Hindustan Lever Ltd., against issue of Form No. 25 by which Hindustan Lever Ltd. declared themselves as purchasers of coffee from the petitioners within the State. Form No. 25 prescribed under Rule 32(14), issued by Hindustan Lever confirmed their purchase within the State and unless they sell the goods within the State again, they will be liable to pay tax as last purchasers in the State.

(3.) While the position remained so, the finance bill 1998 was passed by the Assembly and notified on 28.07.1998. However, proposal for amendment for changing the point of levy of tax on coffee beans was given up and the original provision that is tax on first purchase was retained, Consequently, petitioners became liable for payment of tax on first purchase of coffee within the State for the whole year. Even though the Finance Act was notified on 28.07.98, petitioners neither filed revised monthly returns declaring the first purchase turnover of coffee for three months. April to July, as taxable turnover nor remitted the tax along with such returns or even in the annual return filed in Form 8 for the year 1998-99.