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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 ..... vil Appeal No. 5557 of 1990, Civil Appeal No. 305, Civil Appeal No. 306, Civil Appeal No. 307 of 1992, N. Sudhakaran, Advocate, for the respondent in C.A. No. 1015 of 1988 and C.A. Nos. 1098 to 112 of 1988. G.B. Pai, Senior Advocate (S. Sudhakaran, Advocate of J.B. Dadachaniji & Co., Advocate,With him), for the respondents in C.A. No. 189 of 1990. P.H. Parkh, Advocate, for the respondent in C.A. No. 305 of 1992. A.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 pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot be increased by any amendment of the State Act or any legislation by the State. All the revision petitions filed by the assessees were allowed by the High Court of Kerala accepting their contention following the judgment of the Division Bench of the same court reported in Assistant Commissioner (Assessment), Sales Tax v. Janatha Expeller Co. [1987] 64 STC 435 which confirmed a single Judge judgment 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- Sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er rates than those specified in sub-section (1) or sub-section (2) as may be mentioned in the notification; (b) that in respect of all sales of goods or sales of such classes of goods as may be specified in the notification, which are made, in the course of inter- State trade or commerce, by any dealer having his place of business in the State or by any class of such dealers as may be specified in 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... higher percentage of tax. In truth and effect it is a levy of tax on the sales or purchases of the dealers. However, it was contended on behalf of the assessees that the words "under the sales tax law of the appropriate State" in section 8(2-A) of the Central Sales Tax Act refers to only the General Sales Tax Act provisions and not the Additional Sales Tax Act provisions. Section 2(i) of the Central 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the assessees-respondents in all these cases are liable to pay sales tax at the rate including the additional sales tax in respect of their inter-State sale under the Central sales tax assessment orders. The High Court has reversed the order of the assessment in all these cases relying on the decision of a learned single judge in Janatha Expeller Co.'s case [1982] 49 STC 216 (Ker) which was affirmed 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vernment, was made in exercise of the powers under section 8(5) of the Central Act enacted by the Parliament, and the Kerala Additional Sales Tax Act was made by the State Legislature and that could not have the effect of superseding the notification. We may also point out that the learned Judge also had confined his decision to the notification and its effect though he had dealt with the scope of section 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 Assistan ..... X X X X Extracts X X X X X X X X Extracts X X X X
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