2010 (8) TMI 871 - HC - VAT and Sales Tax

Summary

Issues: Interpretation of tax liability on the last purchase of goods exported in a different form; Application of Full Bench decisions and Supreme Court rulings in determining tax liability.

The judgment delivered by the High Court of Kerala addressed the issue of tax liability on the last purchase of goods exported in a different form. The petitioner, an assessee, sought exemption under section 5(3) of the Central Sales Tax Act for exporting powdered ginger. However, the Tribunal held that tax is payable on the last purchase of ginger in the State, as the exported form differed from the purchased form. The Tribunal's decision was based on the Full Bench decision in R. Suresh Kumar v. State of Kerala, where the conversion of tamarind seed into powder was considered manufacturing. Additionally, the Tribunal referred to the Supreme Court ruling in Rajasthan Roller Flour Mills Association v. State of Rajasthan, emphasizing that different forms of a product may have distinct commercial identities and uses. Furthermore, the Tribunal cited the High Court decision in Tatson Food Industries v. State of Kerala, which established that turmeric and turmeric powder are not identical goods. Consequently, the Tribunal concluded that ginger powder is a manufactured product and upheld the tax liability on the last purchase of ginger in the State, despite its export in powdered form. The High Court, noting the Tribunal's reliance on relevant court decisions applicable to the case, dismissed the sales tax revision case.