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1993 (1) TMI 265 - HC - VAT and Sales Tax
Issues involved: Interpretation of sales tax liability on display of fireworks u/s Kerala General Sales Tax Act, 1963 for assessment years 1984-85 to 1988-89.
Summary: The High Court of Kerala heard a batch of five cases where the Revenue, as the petitioner, contested the assessment of sales tax on the display of fireworks by the respondent, a fireworks manufacturer and exhibitor. The assessing authority levied sales tax on the estimated turnover of fireworks for the relevant years, considering the display as a sale. However, the first appellate authority ruled that the display of fireworks should not be included in the assessable turnover for sales tax purposes. The Revenue then filed second appeals before the Sales Tax Appellate Tribunal, which upheld the decision stating that no transfer of property occurs during the display of fireworks as the explosives are consumed in the process. The Tribunal relied on the decision of the Patna High Court in Pest Control India Ltd. v. Union of India [1989] 75 STC 188 to support its reasoning. The common order of the Appellate Tribunal for all five years, dated May 17, 1991, was challenged by the Revenue in revisions. The counsel for the Revenue argued that the Tribunal erred in its findings regarding the display of fireworks and the transfer of property. However, the Court upheld the Tribunal's decision, stating that the contract was indeed for the display of fireworks, and no transfer of property occurs as the explosives are consumed during the display, leaving no tangible goods for transfer. The Court agreed with the view of the Patna High Court that for a transfer of property to take place, the goods themselves must exist, which was not the case in this scenario. Therefore, the Court dismissed the revisions, upholding the decision of the Appellate Tribunal. In conclusion, the High Court of Kerala dismissed the petitions, affirming the Appellate Tribunal's decision that no transfer of property takes place during the display of fireworks, and therefore, the sales tax liability on the estimated turnover of fireworks was not justified.
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