DY COMMISSIONER OF SALES TAX Vs. SUPREME BOARDS

JUDGEMENT

(1.) During the assessment year 1989-90 the assessee who is the respondent in this revision application purchased among other goods resin from one newly set up small scale undertaking entitled to exemption from payment of sales tax under Notification S.R.O. No. 968/80, dated 29.9.1980 issued under S. 10 of the Kerala General Sales Tax Act, 1963 (hereinafter referred to as 'the Act'). The assessing authority as well as the first appellate authority took the stand that the assessee is liable to pay purchase tax on the turnover under S.5 A of the Act as no tax was paid under S.5 of the Act eventhough resin is a taxable commodity. However, the Sales tax Appellate Tribunal took the view that S.5 A of the Act is not attracted as the dealer purchased resin from a small scale undertaking eligible for exemption on the strength of the notification issued under S.10 of the Act. According to the Tribunal, as resin is exempted from tax on the first sale point in the hands of the supplier it qualified for exemption from tax both under S.5 and S.5A of the Act and hence no purchase tax is payable on the purchase value of the goods purchased from a newly set up small scale industrial undertaking qualified for exemption eventhough there is no exemption for the purchaser. This order of the Tribunal dated 22.9.199 3 is questioned in this revision application filed by the Revenue.

(2.) The question, to be decided is whether purchase tax under S.5 A can be levied from a person who purchased taxable goods from a dealer who is a newly set up small scale industrial unit eligible for exemption on the strength of the notification issued under S.10 of the Act.

(3.) To answer the above question we may quote S.5A(1) of the Act which is as follows: