1987 (7) TMI 558 - HC - VAT and Sales Tax

Summary

Issues:
Rate of taxation for duplicating paper and stencil paper under the Kerala General Sales Tax Act for the assessment year 1980-81.

Analysis:
The Revenue contended that duplicating paper and stencil paper should be taxed at 15% under item No. 21 of the First Schedule before its amendment by Act 19 of 1980. However, the Appellate Tribunal ruled that these items are not taxable under item No. 21 and that duplicating paper should be taxed at 8% under item No. 97 post-amendment, while stencil paper should be taxed at the general rate of 4%. The Tribunal's decision was challenged by the Revenue in revision.

The Court examined the meaning of "accessory" in relation to duplicating machines based on a Supreme Court decision and concluded that duplicating paper and stencil paper cannot be considered accessories to duplicating machines. The Court also addressed whether stencil paper can be classified as paper, and based on precedents, held that stencil paper does not fall under item No. 97 of the First Schedule even after the amendment by Act 19 of 1980.

Regarding duplicating paper, it was acknowledged that post-amendment, it falls under item No. 97 of the First Schedule. The Court then considered whether duplicating paper and stencil paper could be classified as paper products under item No. 97 and taxed at 8%. Referring to a previous decision, the Court defined "paper product" and concluded that duplicating paper and stencil paper do not meet the criteria to be considered paper products under the Act.

In conclusion, the Court upheld the Tribunal's decision, ruling that stencil paper should be taxed at 4% and duplicating paper at 4% until September 15, 1980, and at 8% thereafter. The Court found no reason to interfere with the Tribunal's decision, dismissing the tax revision case as without merit and without costs.