S. P. L. LTD Vs. COMMERCIAL TAX INSPECTOR

JUDGEMENT

(1.) APPELLANTS are traders in Kerala engaged in sale of marble, granite, ceramic tiles, glass sheets etc. These items are mainly brought from other States or are imported from abroad. In exercise of powers conferred under S.47(16A) of the Kerala Value Added Tax Act, 2002 (hereinafter called "the Act"), the Commissioner issued Circular No. 50/2006 declaring 12 items as tax evasion prone goods and authorising recovery of sales tax in advance on the said commodities on arrival of the same in the State. In other words, the Notification authorises recovery of tax at the Boarder Check Post or at the Port area through which goods are brought to the business places of the dealers for sale. By a later Circular No. 53/2006, the Commissioner of Commercial Taxes directed collection of advance tax on purchase value of the notified goods increased by freight and 5% towards gross profit. Appellants challenged constitutional validity of S.47(16A) and the two Circulars issued by the Commissioner on the ground that the same are unconstitutional, illegal and arbitrary. However, the learned Single Judge upheld the constitutional validity of the statutory provision and the validity of the Circulars issued thereunder, against which these appeals are filed. We have heard Senior counsel Dr. K. B. Mohammed Kutty and other counsel appearing for the appellants and the Special Government Pleader appearing for the respondents.

(2.) DURING hearing of appeals, counsel for both sides informed the Court that by virtue of subsequent amendment to the Circulars, the Commissioner has excluded lifts, elevators and escalators and petroleum products other than LPG from payment of advance tax. Similarly, Circular No. 53/2006 was also amended excluding 5% addition towards gross profit for the determination of value for payment of advance tax. Subsequent to the amendment, there are ten items on which advance tax is payable. The said items and rate of tax provided for payment of advance tax are given hereunder: