1973 (1) TMI 89 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Whether catalogues, annual reports, and a publication called "Tea Review" are "books meant for reading and reference" under Notification S.R.O. No. 342 of 1963.
2. The interpretation of the term "books" in the context of the Kerala General Sales Tax Act, 1963.
3. The burden of proof in claiming tax exemption under a fiscal statute.

Detailed Analysis:

1. Whether catalogues, annual reports, and a publication called "Tea Review" are "books meant for reading and reference" under Notification S.R.O. No. 342 of 1963:

The petitioner, a printing press, claimed that the items in question should be considered "books meant for reading and reference" under the exemption provided by Notification S.R.O. No. 342 of 1963. The Sales Tax Officer initially upheld this claim, but the Deputy Commissioner in a suo motu revision held that the exemption was improperly granted. The Sales Tax Appellate Tribunal also ruled against the petitioner, leading to this revision.

The court examined whether these items fall under the category of "books meant for reading or reference" as per the notification. The explanation in the notification excluded "account books, note-books, diaries and the like," suggesting a narrower interpretation of what constitutes a book for exemption purposes.

2. The interpretation of the term "books" in the context of the Kerala General Sales Tax Act, 1963:

The court emphasized that the term "books" should be interpreted based on the explanation provided in the notification, which excludes items like account books, note-books, and diaries. The court rejected the petitioner's argument that a liberal interpretation should be applied, noting that while tax provisions should be construed in favor of the subject, exemptions should be strictly construed. The burden of proof lies on the petitioner to demonstrate that the items qualify for exemption.

3. The burden of proof in claiming tax exemption under a fiscal statute:

The court reiterated that the burden of proving eligibility for an exemption rests with the claimant. Citing precedents such as Rangaswami Chettiar & Co. v. Government of Madras and Commissioner of Income-tax v. Ramakrishna Deo, the court affirmed that it is the petitioner's responsibility to establish that the items fall within the scope of the exemption.

The court found that the catalogues, annual reports, and "Tea Review" are not "books meant for reading or reference" as intended by the notification. These items serve specific commercial purposes and do not align with the public interest objective of the exemption, which is to promote education, knowledge, enlightenment, or recreation.

Conclusion:

The court concluded that the items in question do not qualify for the exemption under the notification. The tax revision case was dismissed, and the petitioner was held liable for the tax without costs. The judgment underscores the importance of strict interpretation and the burden of proof in claiming tax exemptions.