1986 (10) TMI 319 - HC - VAT and Sales Tax

Summary

Issues:
Challenge to levy of sales tax on sales turnover of confiscated foreign textiles and cigarettes under the Kerala General Sales Tax Act, 1963.

Analysis:
The case involved a tax revision challenge by the Revenue against the Kerala Sales Tax Appellate Tribunal's order, which allowed an appeal by the respondent regarding the levy of sales tax on confiscated foreign textiles and cigarettes. The respondent, a co-operative society sponsored by the Kerala Government, engaged in purchasing consumer goods for distribution to other co-operative societies and selling goods through retail shops. The disputed sales of foreign confiscated items were claimed to be exempt from tax under section 9 of the Act, based on specific entries in the Third Schedule of the Act related to tobacco and fabrics. The assessing authority attempted to levy tax on the sales, arguing that the definitions in the Central Excises and Salt Act applied only to items produced in India, not to imported goods.

The Court rejected the Revenue's argument, emphasizing that section 9 of the Act exempts dealers dealing in goods specified in the Third Schedule from tax. The entries in the Schedule refer to definitions in the Central Excises and Salt Act, describing goods exempt from tax. The Court clarified that for exemption, it is sufficient that the goods sold match the descriptions in the corresponding entries of the Central Excises and Salt Act. The Court refused to interpret the entries to require goods to be manufactured in India, stating that such an interpretation would add words to the statutes.

The Court cited a previous case involving imported sugar to support its interpretation, where it was held that entries in the Third Schedule were used for brevity and should not be limited to goods manufactured in India. As the present case aligned with the previous decision, the tax revision case was dismissed. Additionally, the Court declined the Senior Government Pleader's request for a certificate to appeal to the Supreme Court, stating that the case did not involve substantial questions of law requiring Supreme Court intervention.

In conclusion, the Court upheld the Tribunal's decision, dismissing the tax revision case and denying the request for a Supreme Court appeal certificate.