1962 (6) TMI 46 - HC - VAT and Sales Tax

Summary

Issues: Interpretation of tax law regarding cashewnut and its kernel under the General Sales Tax Act, 1125.

The judgment by the Kerala High Court addressed the issue of the interpretation of the General Sales Tax Act, 1125, specifically regarding the taxation of "cashewnut including its kernel." The court highlighted that a notification under section 5(vii) of the Act dated April 1, 1958, taxed cashewnut including its kernel at a single point, the last purchase in the State. The court analyzed the legislative history and the wording of the amendment made by the General Sales Tax (Second Amendment) Act, 1958, which substituted "cashew and its kernels" with "cashewnut including its kernel." The court considered the intention behind the amendment, as stated in the Statement of Objects and Reasons, to clarify that only the whole or unshelled nut with the kernel inside attracts the purchase tax, not the kernel after shelling. The judges emphasized the significance of the wording "including" in the context of the tax law and concluded that the purchases of kernel, even if they were the last purchases in the State, do not attract the purchase tax. The court accepted the assessee's contention, overturning the decision of the Appellate Tribunal and allowing the revision cases. The department was ordered to pay the costs of the assessee, including the advocate's fee.