2013 (11) TMI 1579 - HC - VAT and Sales Tax

Summary

Issues involved:
The judgment pertains to the assessment of purchase tax on paddy by a rice mill under Section 5A of the Kerala Government Sales Tax Act, specifically addressing the exemption available to small scale industry units and the applicability of previous court decisions.

Assessment of Purchase Tax:
The respondent assessee, a rice mill, was subject to purchase tax on paddy under Section 5A of the Act. The assessment process involved levying tax on purchases from unregistered dealers and calculating the tax payable for the sale of rice and bran. The exemption was granted only for the balance amount after reducing the tax leviable under Section 5A.

Appeals and Tribunal Decision:
The respondent assessee sought exemption on the entire tax payable without deductions for rice and bran. The first appellate authority dismissed the appeal, but the Tribunal partly allowed it based on a decision of the Apex Court in a similar case. A rectification petition was filed by the assessee, citing the Apex Court decision and challenging the legality of levying purchase tax.

Legal Interpretation and Previous Decisions:
The Tribunal's reliance on the Apex Court decision was contested, as it pertained to iron and steel, not rice milling. The State argued that a previous judgment by the High Court had already addressed the issue in detail, distinguishing it from the Apex Court decision. Another Division Bench judgment supported the application of the law in a similar case, emphasizing the importance of considering the sale of different products in determining tax liability.

Final Decision:
Considering the precedents and finality of previous court decisions, the High Court set aside the Tribunal's decision, opining that purchase tax should be levied on the entire sales without deductions for rice and bran. The Revision Petitions were allowed in favor of the respondent assessee.