1993 (7) TMI 314 - HC - VAT and Sales Tax

Summary

Issues:
1. Assessment of tax on inter-State sale of coconuts under Kerala General Sales Tax Act and Central Sales Tax Act for assessment years 1978-79 and 1979-80.
2. Applicability of section 8(2A) of the Central Sales Tax Act for determining the tax rate.
3. Interpretation of Government notification S.R.O. No. 350/65 regarding exemption from tax assessment under the Central Sales Tax Act.

Analysis:
1. The petitioner, engaged in the coconut business, filed returns claiming exemption for inter-State sales of coconuts under the Kerala General Sales Tax Act for the assessment years 1978-79 and 1979-80. The assessing authority granted exemption for the purchase turnover related to inter-State sales but later proposed to assess the turnover at a higher rate under the Central Sales Tax Act. The Appellate Assistant Commissioner and Sales Tax Appellate Tribunal upheld the revised assessments, leading to the present tax revision cases.

2. The key issue revolves around the interpretation of section 8(2A) of the Central Sales Tax Act, which provides for exemption or lower tax rates for goods exempted or taxed at rates below 4%. The petitioner contended that the tax should be levied at the lower rate of 3% under this provision. However, the Tribunal found that section 8(2A) does not apply to declared goods, which includes the coconuts sold by the petitioner. As the sales were not supported by requisite declarations, the Tribunal's decision to levy tax at twice the applicable rate inside the State was upheld.

3. Another aspect of the dispute concerns the applicability of Government notification S.R.O. No. 350/65, which exempts certain transactions from Central Sales Tax if tax has been collected under the Kerala General Sales Tax Act. The Tribunal correctly determined that this notification does not apply to the petitioner's case as no tax was levied under the Kerala General Sales Tax Act for the relevant transactions. Therefore, the Tribunal's decision on the inapplicability of the notification was deemed appropriate.

In conclusion, the High Court dismissed both tax revision cases, upholding the assessments made under the Central Sales Tax Act for the inter-State sale of coconuts by the petitioner. The Court found no merit in the petitioner's arguments regarding the applicability of section 8(2A) and Government notification S.R.O. No. 350/65, affirming the decisions of the Tribunal.