1986 (6) TMI 234 - HC - VAT and Sales Tax

Summary

Issues:
Assessment of turnover as "last purchase" under State Act for rubber purchased from open prison in Kerala. Determination of inter-State nature of transaction for tax assessment purposes.

Analysis:
The judgment by the Kerala High Court involved the assessment of a turnover of rubber purchased by an assessee's branches from an open prison in Kerala. The main issue was whether this purchase constituted an inter-State transaction and was therefore not assessable under the State Act. The assessing authority and Deputy Commissioner of Sales Tax had held the transaction as exigible to tax under the State Act, but the Appellate Tribunal ruled in favor of the assessee, stating that the turnover formed part of inter-State purchases and was not taxable under the State Act.

The Court analyzed the facts, including the movement of goods from the State to branches outside Kerala, based on invoices, N forms, and lorry receipts. It was found that the movement of goods was a result of a contract of sale between the seller in Kerala and the purchasers outside the State. The Court referred to relevant Supreme Court decisions to support the conclusion that the transactions were indeed inter-State purchases. The findings of the Appellate Tribunal were considered justified, as they were based on factual evidence and materials presented.

Additionally, the Court addressed the contention by the Revenue regarding the reliability of a letter from the Superintendent of Prisons. Despite doubts about the genuineness of the letter, the Court upheld the conclusion of the Appellate Tribunal based on other evidence such as N forms, invoices, and certificates of ownership. The tax revision case was deemed without merit and dismissed.

In conclusion, the Court affirmed the decision of the Appellate Tribunal, stating that the purchases of rubber from the open prison in Kerala were in the course of inter-State trade, making the assessee not liable to be taxed under the Kerala General Sales Tax Act. The judgment highlighted the inter-State nature of the transactions and the sufficiency of evidence supporting the findings of the Appellate Tribunal. The tax revision case was ultimately held to be without merit.