1986 (12) TMI 364 - HC - VAT and Sales Tax

Summary

Issues:
1. Inclusion of proceeds of discarded items in taxable turnover under the Kerala General Sales Tax Act.
2. Interpretation of the definition of "dealer" and "business" before and after the amendment by Act 22 of 1974.
3. Whether the turnover relating to discarded items like cashew shells, gunnies, and empty tins is exigible to sales tax.

Detailed Analysis:
1. The case involved 29 revisions filed by the State of Kerala against cashew dealers who were assessed under the Kerala General Sales Tax Act for assessment years prior to 1974. The assessing authority included the proceeds of discarded items in the taxable turnover, which the dealers objected to. The Sales Tax Appellate Tribunal, relying on a previous decision, held that the dealers should be given exemption for the turnover relating to discarded items. The main issue was whether the turnover of discarded items should be subject to sales tax.

2. The court examined the definitions of "dealer" and "business" under the Kerala General Sales Tax Act before and after the 1974 amendment. The definition of "dealer" included any person engaged in buying, selling, supplying, or distributing goods, while "business" encompassed trade, commerce, manufacture, or any similar activity with or without profit motive. The court referred to previous judgments to determine whether the dealers qualified as "dealers" under the Act for the discarded items in question.

3. The court considered a previous case where the assessee was not considered a dealer for certain items, leading to those items' sale proceeds not being included in the taxable turnover. After careful consideration, the court upheld the decision that the dealers were entitled to exemption for the turnover related to discarded items like cashew shells, gunnies, and empty tins. The court found that the decision was in line with principles established by the Supreme Court in previous cases and concluded that the Sales Tax Appellate Tribunal's decisions did not require any interference.

In conclusion, the court dismissed the revisions filed by the State of Kerala, stating that they were without merit and ordered no costs to be paid.