DEPUTY COMMISSIONER OF SALES TAX LAW BOARD OF REVENUE TAXES ERNAKULAM Vs. M K CHERIYA MAMMOO AND BRORS

JUDGEMENT

(1.) THIS tax revision is preferred by the State against the decision of the Sales Tax Appellate Tribunal, Additional Bench, Kozhikode. The assessment year with which we are concerned is 1971-72. The assessee is a dealer in pepper, ginger and arecanuts. He claimed exemption in respect of a turnover of Rs. 5,45,406. 90 as representing transactions of inter-State purchases effected by it. The inter-State character of the purchases was claimed for the turnover in question on the footing that the commodities of that value were purchased from Mahe which was within the Pondicherry State at the relevant time, and now a Union Territory. The Assistant Commissioner of Sales Tax, the first authority, and the Deputy Commissioner (Appeals) as the appellate authority, both disallowed the exemption. They considered at length the relevance and the probability of the case of the assessee that the purchases were from Mahe. They drew a detailed geographic picture of the improbability of the tiny and small Mahe markets feeding such a large volume of trade as had been represented by the assessee's purchases. They pointed out that Mahe was not a producing centre for the articles in question in respect of which deduction from turnover was claimed. They were of the view that the assessee's case that the purchases were actually effected from Mahe could not be believed or accepted. On further appeal by the assessee, the Sales Tax Appellate Tribunal noticed that the assessee had produced the books of account, bills, vouchers and other documents to prove the purchases, all of which had been noticed also by the first authority and by the appellate authority. The Sales Tax Appellate Tribunal was of the view that the question whether the Mahe markets could have actually fed the trade in question, and whether the purchases of the magnitude and value represented by the turnover in respect of which exemption was claimed could have been effected in Mahe, were irrelevant for consideration in judging the deductability of the turnover. THIS was against the view taken by the Tribunal itself on an earlier occasion in the judgment of the Full Tribunal in T. A. No. 205 of 1970 dated 11th October, 1973, a copy of which was placed before us by the learned Government Pleader, along with C. M. P. No. 9949 of 1978.

(2.) THE learned Government Pleader strongly contended before us that the approach of the Tribunal has been vitiated as it dismissed out of consideration a very relevant and material circumstance, namely, whether the purchases in question could possibly have been made from the Mahe markets as claimed by the assessee. We are impressed by this contention raised by the learned Government Pleader. We think the Tribunal was wrong in ruling out as irrelevant material, what appears to be very vital and crucial, namely, whether the purchases in question can possibly and reasonably be said to have been effected from Mahe. It is then and then alone, that the purchases qualify for exemption on the ground of inter-State purchases. As the entire approach of the Tribunal has been vitiated as a result of this initial mistake made by the Tribunal, we are obliged to set aside the judgment of the Tribunal and to remit the appeal back to the Tribunal for reconsideration in accordance with law and in the light of the observations contained in this judgment. THEre will be no order as to costs. Appeal remitted. .