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1979 (10) TMI 193 - SC - VAT and Sales Tax


Issues:
1. Interpretation of entry 56 in the Kerala General Sales Tax Act, 1963 regarding taxation of ornaments and gold articles.
2. Interpretation of entry 26A in the Act concerning the taxation of G.I. pipes.

Analysis:
1. The first issue revolves around whether the ornaments and gold articles purchased by the assessee qualify as "bullion and specie" under entry 56 of the Act. The court emphasized interpreting the terms in common parlance rather than technical or scientific definitions. It clarified that "bullion" refers to raw gold or silver in mass, excluding manufactured products like ornaments. Similarly, "specie" denotes metallic currency coins, not ornaments. Consequently, the court concluded that the purchased gold items do not fall under entry 56, subjecting them to a 3% tax rate under the Act.

2. The second issue concerns the taxability of G.I. pipes under entry 26A as "water supply and sanitary fittings." The court highlighted that "sanitary fittings" entail materials used in lavatories, urinals, or bath-rooms, as defined in precedent. The court noted that if the pipes were for underground water supply, they wouldn't qualify as "sanitary fittings." Moreover, the term "water supply and sanitary fittings" implies items attached to buildings for water supply in specific locations, excluding pipes laid underground for general water transportation. As the authorities didn't assess the pipes' intended use, the court remanded the case for a detailed evaluation by the Appellate Assistant Commissioner to determine if the G.I. pipes meet the criteria for "water supply and sanitary fittings."

In conclusion, the court allowed the appeal, setting aside previous orders. It ruled that the gold items are subject to a 3% tax rate and remanded the assessment of G.I. pipes for a thorough examination.

 

 

 

 

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