ISMAIL Vs. STATE OF KERALA

JUDGEMENT

(1.) THE assessee in this tax revision challenges the view of the Sales-tax Appellate Tribunal regarding the assessability to Sales-tax of the turnover of a meat vendor at Trichur in respect of his transaction. THE nature of the transaction, the circumstances under which the question arose, and the contentions raised, have been described in the order of the Tribunal thus: "here, it is admitted by the appellant that he is purchasing goats and sheep for slaughtering them. It is not disputed that live stock will be goods within the meaning of the Kerala General Sales-tax Act. According to the assessing officer, when the appellant is killing these goats and sheeps, the appellant is consuming them for the manufacture of other goods for sale within the State, for, according to him, when a live goat is cut and killed, what is produced is not a live goat, but only lifeless mutton So, the officer has taken the view that in the business of the appellant, there is a manufacturing process, but as stated above, according to the appellant, he is only processing live goat or sheep into mutton by killing them and cutting them into pieces, and he is not doing anything more than processing the mutton". THE question therefore for consideration before the tribunal and before us is whether the meat-vending in the circumstances thus described, would attract S. 5a of the Kerala Central Sales-tax Act which is as follows: "5a. Levy of purchase tax. (1) Every dealer who, in the course of his business, purchases from a registered dealer or from any other person any goods, the sale or purchase of which is liable to tax under this Act. in circumstances in which no tax is payable under S. 5, and either (a) consumes such goods in the manufacture of other goods for sale or otherwise; or (b) disposes of such goods in any manner other than by way of sale in the State; or (c) despatches them to any place outside the State except as a direct result of sale or purchase in the course of inter-State trade or commerce, shall, whatever be the quantum of the turnover relating to such purchase for a year, pay tax on the taxable turnover relating to such purchase for the year at the rates mentioned is S. 5. (2) Notwithstanding anything contained in sub-section (1), a dealer (other than a casual trader or agent of a non-resident dealer.)purchasing goods, the sale of which is liable to tax under S. 5, shall not be liable to pay tax under sub-section (1) if his total turnover for a year is less than twenty-five thousand rupees: Provided that where the total turnover of such dealer for the year in respect of the goods mentioned in clause (i) of sub-section (1) of s. 5 is not less than two thousand five hundred rupees, be shall be liable to pay tax on the taxable turnover in respect of those goods. (3) Notwithstanding anything contained in the foregoing provisions of this section, a dealer referred to in sub-section (1), who purchases goods, the sale of which is liable to tax under clause (ii) of sub-section (1) of S. 5. and whose total turnover for a year is not less than twenty five thousand rupees but not more than thirty thousand rupees may, at his option, instead of paying the tax in accordance with the provisions of sub-section (1), pay tax at the rate mentioned in sub-section (1) of S. 7 in accordance with the provisions of that section. "

(2.) THE ingredients of clause (1) (a) of the Section and the scope of these ingredients fell for elaborate discussion in a recent decision of a Division Bench of this Court in Deputy Commr, of Sales-tax (Law)Board of Revenue (Taxes) Ernakulam v. Pio Food Packers (41 STC 364) (1978 klt. 279) All the authorities were surveyed in that decision with respect to the three ingredients involved in the Section, viz. , (1) the 'consumption' of the goods; (2) process of 'manufacture' involved, and (3) the production of 'other goods'. In the light of the provisions of the Section, and the decision referred to, the question before us would be: whether there is a 'consumption', followed by a 'manufacture' of 'other goods' when goats and sheep are slaughtered for sale in the market, and sold as mutton or meat. We have given the matter our careful attention; and we have again given careful consideration to the elaborate arguments in regard to the processes involved in the transaction and their effect in the light of the provisions of the Section especially as one of us was not a party to the earlier Division Bench ruling. We are clearly of the view that the Tribunal was not correct in the view that it took, and that it cannot be said that there was a 'consumption' resulting in the 'manufacture' of 'other goods' within the meaning of the Section. We do not wish to survey the decisions which were referred to in the recent Division bench judgment to which reference has been made. We think at least four of those decisions are particularly appropriate.

(3.) THE third of the cases which we consider appropriate is the Pulpally Devaswom's case (40 STC 350) (1977 KLT. 549) THEre it was held that the spontaneously grown trees of the assessee cannot be said to have been'consumed' for the 'manufacture' of 'other goods' when they were cut into logs, transported and sold. THE felling and transport of the trees were only the minimal processes for rendering them marketable.