1980 (3) TMI 239 - HC - VAT and Sales Tax

Summary

Issues:
Interpretation of whether rock phosphate and other fertilisers are considered "chemical fertilisers" under item 54 of the First Schedule of the Kerala General Sales Tax Act.

Analysis:
The case involved three tax revision cases filed by the State against the Sales Tax Appellate Tribunal's order regarding the inclusion of various fertilisers in the taxable turnover for the years 1973-74, 1974-75, and 1976-76. The assessee, a co-operative society, contended that the sales of these fertilisers were not taxable as they fell under the description of "chemical fertilisers" in item 54 of the Act. The Tribunal upheld the exemption claim based on a previous court decision. The State challenged this decision, arguing that the Tribunal erred in concluding that rock phosphate and other fertilisers were "chemical fertilisers" without proper consideration.

The Government Pleader contended that rock phosphate did not meet the criteria to be classified as a "chemical fertiliser" as it was a mineral collected through mining operations and not produced through a chemical process. The Court agreed that the previous court decision did not definitively classify rock phosphate as a chemical fertiliser and that the Tribunal erred in assuming so. However, the Court noted that a legislative amendment explicitly included rock phosphate as a "chemical fertiliser" under item 54, removing any ambiguity on its classification.

Regarding the other fertilisers like ultrafos, dolomite, peramphos, azo, and thomas phosphate, the Court found that the Tribunal's classification as "similar items known under different names" lacked proper consideration of the evidence. The Court directed a re-investigation into whether these fertilisers should also be considered chemical fertilisers under item 54, allowing both parties to present additional evidence. The case was remanded to the Tribunal for further determination on these fertilisers' classification.

In conclusion, the Court upheld the Tribunal's decision regarding rock phosphate as a chemical fertiliser based on the legislative amendment but remanded the case for further investigation into the classification of other fertilisers. The parties were directed to bear their respective costs.