2004 (10) TMI 567 - HC - VAT and Sales Tax

Summary

Issues:
Assessment of duty entitlement pass book (DEPB) premium under the Kerala General Sales Tax Act, 1963.

Analysis:
The judgment pertains to the assessment year 2000-01 where the assessee filed a return excluding amounts received as export house premium and DEPB premium under the Kerala General Sales Tax Act, 1963. The Appellate Tribunal upheld the assessment, leading to the revision petition. The DEPB Scheme aims to neutralize customs duty on export products by granting duty credit against exports. The DEPB credit is specified as a percentage of the export value and can be used for importing raw materials, parts, etc. The DEPB has a market value and can be freely transferred. The contention arose whether DEPB premiums are exigible to tax under the Act.

The petitioner argued that DEPB premiums do not involve goods transfer and are merely actionable claims, thus not taxable. However, the Senior Government Pleader contended that DEPB falls within the Act's definition of goods. Citing relevant cases, the court noted the Delhi High Court's view that DEPB is property with a distinct value and freely tradable, not an actionable claim. The court aligned with the Supreme Court's stance that such schemes are goods and not actionable claims. Consequently, the court held that DEPB premiums are assessable under the Kerala General Sales Tax Act, 1963.

In conclusion, the court dismissed the sales tax revision petition, affirming the assessment of DEPB premiums under the Act.