1998 (7) TMI 677 - HC - VAT and Sales Tax

Summary

Issues:
1. Classification of leco fine as a declared commodity under the Kerala General Sales Tax Act, 1963.
2. Inclusion of freight in taxable turnover.

Classification of Leco Fine:
The main issue in this judgment was whether leco fine, claimed by the assessee as a form of coke, should be considered a declared commodity under the Kerala General Sales Tax Act, 1963. The assessing authority treated leco fine as coke and taxed it at a rate of four percent. However, the Deputy Commissioner raised concerns regarding the classification of leco fine, referring to a decision of the Gujarat High Court related to lignite and coal taxation. The Kerala High Court differentiated the Gujarat case, emphasizing that under the KGST Act, there was no separate entry for lignite/leco fine. After considering precedents from the Karnataka and Madras High Courts, which supported the view that leco is a form of coal, the court concluded that leco fine is indeed a form of coke and thus a declared commodity subject to a four percent tax rate.

Inclusion of Freight in Taxable Turnover:
Another issue addressed in the judgment was whether freight should be included in the taxable turnover. The Appellate Tribunal's finding indicated that the matter regarding freight remained open, with no final decision recorded. While the Tribunal dismissed the appeal, the court clarified that this dismissal should be read in conjunction with the open nature of the freight inclusion issue. As a result, the court found no need to make a decision on this matter, ultimately allowing the revision petitions.

In conclusion, the Kerala High Court ruled in favor of the assessee, classifying leco fine as a declared commodity subject to a four percent tax rate. The court also clarified that the inclusion of freight in the taxable turnover was an unresolved issue, leading to the allowance of the revision petitions.