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TMI Blog1992 (1) TMI 303X X X X Extracts X X X X X X X X Extracts X X X X ..... S. Nambiar, Senior Advocate (Shanta Vasudevan and P.K. Manohanar, Advocate, with him) for the respondent in C.A. No. 4042 of 19877. P.S. Poti, Senior Advocate (K.R. Nambiar, Advocate, with him) for the appellants in all the appeals. -------------------------------------------------- The judgment of the Court was delivered by V. RAMASWAMI, J.-Leave granted in Special Leave Petition Nos. 8417 and 8492-93 of 1987. In this batch of appeals the appellants are the State of Kerala. The respondents are registered dealers under the Kerala General Sales Tax Act, 1963, hereinafter called "the State Act", as well as under the Central Sales Tax Act, 1956, hereinafter called "the Central Act". Some of the assessees carry on the business of sales and purchase of coir products which is taxable under the State Act at 2 per cent, some of the dealers carry on the business of hosiery which is taxable at 3 per cent. The respondents-assessees in Civil Appeal Nos. 1426 and 1427 of 1988 deal in automobile spares which is taxable at 15 per cent and the assessee in Civil Appeal No. 1015 of 1988 deals in transformer which is taxable at 10 per cent. The respondent in Civil App ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt in Janatha Expeller Co. v. Assistant Commissioner (Assessment), Sales Tax [1982] 49 STC 216. Before we deal with the decision relied on by them it is better we set out the relevant provisions and understand the scope and implications of the same. "8. Rates of tax on sales in the course of inter-State trade or commerce.-(1) Every dealer, who in the course of inter-State trade or commerce- (a) sells to the Government any goods; or (b) sells to a registered dealer other than the Government goods of the description referred to in sub-section (3); shall be liable to pay tax under this Act, which shall be four per cent of his turnover. (2) The tax payable by any dealer on his turnover in so far as the turnover or any part thereof relates to the sale of goods in the course of inter- State trade or commerce not falling within sub-section (1)- (a) in the case of declared goods, shall be calculated at twice the rate applicable to the sale or purchase of such goods inside the appropriate State; and (b) in the case of goods other than declared goods, shall be calculated at the rate of ten per cent or at the rate applicable to the sale or purchase of such goods inside the appropriate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the notification, to any person or to such class of persons as may be specified in the notification, no tax under this Act shall be payable or the tax on such sales shall be calculated at such lower rates than those specified in sub-section (1) or sub- section (2) as may be mentioned in the notification." In all these appeals the inter-State sales in question which are sought to be taxed admittedly do not fall under sub-section (1) or clause (a) of sub- section (2) of section 8 of the Central Sales Tax Act. The sales were of goods other than the declared goods, therefore, under clause (b) of sub-section (2) of section 8 the tax payable by the dealer on his turnover shall be calculated at the rate of 10 per cent or at the rate applicable to the sale or purchase of such goods inside the State whichever is higher. However, sub-section (2-A) of this section states that notwithstanding anything contained in clause (b) of sub-section (2) the tax payable under the Central Sales Tax Act by the dealer where the intra-State sale of the same under the "sales tax law" of the State is "exempt from tax generally or subject to tax generally at a rate which is lower than four per cent shall be n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Sales Tax Act defines "sales tax law" as meaning "any law for the time being in force in any State or part thereof which provides for the levy of taxes on the sale or purchase of goods generally or on any specified goods expressly mentioned in that behalf, and 'general sales tax law' means the law for the time being in force in any State or part thereof which provides for the levy of tax on the sale or purchase of goods generally". The definition does not say that the sales tax law or the general sales tax law which levies taxes on sale or purchase of goods shall be under a single enactment. What is relevant is whether the tax partakes the character of sales tax or purchase tax. Any other construction would restrict the applicability of section 8(2-A) of the Central Sales Tax Act to the sales tax law that was in force in 1956 when the Central Sales Tax Act came into force and any amendment to the local law would not have any effect on the applicability of that provision. We do not see any logic or reason for such a construction. What is relevant is if a particular intra-State sale transaction in a particular assessment year is subjected to a particular rate of tax that automati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... firmed on appeal by a Division Bench of the same High Court in [1987] 64 STC 435 [Assistant Commissioner (Assessment), Sales Tax v. Janatha Expeller Co.]. That case related to the assessment of a dealer in relation to his inter-State sales turnover of coconut oil and cake. Under the Kerala General Sales Tax Act, 1963, the local sales of coconut oil and cake were taxable at 2 per cent. By reason of the Kerala Additional Sales Tax Act, 1978, the rate of tax had increased to 2.2 per cent. In exercise of the power under section 8(5) of the Central Sales Tax Act the State Government on April 1, 1966, notified that the Government "being satisfied that it is necessary so to do in the public interest, hereby direct that in respect of coconut oil and its cake the tax payable under the said Act by an oil miller having his place of business in the State of Kerala in respect of the sale by him from such place of business of the said goods in the course of inter-State trade or commerce shall be calculated at 1 per cent on the sale price of the goods so sold subject to the condition that the turnover of coconut or copra, from which the said goods were produced by him in his mill within the State ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 8(2-A) of the Central Sales Tax Act also in order to give better understanding of the provisions of section 8(5) of the Central Sales Tax Act. We are unable to see anything in this judgment to support the contention of the respondents-assessees that even in a case which is not covered by any notification under section 8(5) of the Central Sales Tax Act, increase in the rate of tax under the local Act will not have any effect on the applicability of section 8(2)(b) and 8(2-A) of the Central Sales Tax Act. Further, for enhancing the rate notified under section 8(5) of the Central Sales Tax Act no reliance can be placed on section 8(2-A) of the Central Sales Tax Act. However, while agreeing with the view of the learned single Judge, the Division Bench on appeal in the case of Assistant Commissioner (Assessment), Sales Tax [1987] 64 STC 435 (Ker). made certain further observations which in a way supported the contention of the assessees. That passage reads as follows: "We are also of the view, that even in cases where tax is exigible under section 8(2-A) of the Central Sales Tax Act for the inter-State sales, the Kerala Additional Sales Tax Act, 1978 (Act 20 of 1978), has no app ..... X X X X Extracts X X X X X X X X Extracts X X X X
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