1996 (4) TMI 456 - HC - VAT and Sales Tax

Summary

Issues:
1. Exclusion of rubber cess from taxable turnover.
2. Adjustment of tax paid on purchase of reclaimed rubber.
3. Nature of transactions - inter-State sale or local purchase.

Detailed Analysis:

1. The first issue pertains to the exclusion of rubber cess from the taxable turnover under the Kerala General Sales Tax Act. The Tribunal ruled in favor of the assessee based on a Full Bench decision. The Court upheld the Tribunal's decision, citing the precedent and concluding that the exclusion of the said amount was justified.

2. The second issue involves the adjustment of tax paid on the purchase of reclaimed rubber in computing the tax liability of the assessee. The Tribunal allowed the adjustment, considering the assessee's payment of sales tax on the reclaimed rubber purchase. However, the Court found that there was insufficient evidence to support the relief claimed by the assessee. It emphasized that there is no provision enabling authorities to grant such relief under the Kerala General Sales Tax Act.

3. The third issue revolves around determining the nature of transactions - whether they constitute inter-State sales or local purchases. The assessing authority treated the transactions as local purchases based on payment made by the local unit. However, both the first appellate authority and the Appellate Tribunal concluded that the transactions were inter-State sales between the Madras head office and suppliers in Kerala. The Court agreed with the appellate authorities, emphasizing that the nature of the transaction cannot be solely determined by the entity making the payment.

In conclusion, the Court upheld the decisions of the Tribunal and the Appellate Tribunal on all three issues. It clarified that the assessee could claim a refund of erroneously paid tax under section 46A of the Act.