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TMI Blog1994 (7) TMI 262X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee is seeking an opportunity there can be no inconvenience to the Revenue to give an opportunity to the assessee to prove that the profits derived, during the relevant assessment years have been solely utilised for charitable purpose. The judgment of the High Court and that of the Tribunal and the appellate authority have been set aside. - Civil Appeal No. 5064, 5065 of 1989, - - - Dated:- 26-7-1994 - RAMASWAMY K. AND VENKATACHALA N. JJ. V. Ramachandran, Senior Advocate (K.J. John, Advocate, with him), for the appellant. A.S. Nambiar, Senior Advocate (M.A. Firoz, Advocate, with him), for the respondent. -------------------------------------------------- ORDER These appeals, by special leave, arise fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt was in error in its conclusion that the appellant has to prove that it had utilised the income derived for charitable purpose, in the respective assessment years themselves. As per the procedure prescribed under the Kerala General Sales Tax Act (Act 15 of 1963) (for short "the Act") the assessee was required to submit his return at the end of every month and it is not possible to prove that the income derived from the sale of the books had gone in that month towards charitable purpose, when the assessment could not have been completed during the relevant assessment year, utilisation of income may spill over or set apart to the subsequent years. It was, therefore, contended that it was not practicable to establish that the income derived ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee would be entitled to set apart the income for utilisation for charitable purpose before the assessment year is completed? The notification issued under section 10 of the Act reads thus: "S.R.O. No. 342/63.-In exercise of the powers conferred by section 10 of the Kerala General Sales Tax Act, 1963 (Act 15 of 1963) the Government of Kerala, having considered it necessary in the public interest so to do hereby make an exemption in respect of the tax payable under the said Act on the sale or purchase of the goods specified in Schedule I hereto appended and by persons specified in Schedule II hereto appended in regard to their turnover on the sales of goods specified therein subject to the conditions specified therein ................. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e charitable purpose. What is a charitable purpose is a question of fact to be proved before the Sales Tax Officer or on appeal, etc. Therefore, it is for the assessee to prove, as a fact, that the profits derived by the sale of the goods specified in the Schedule, had been utilised solely for charitable purposes and on proof thereof that much of the amount would get exempted from exigibility to tax. The Tribunal, therefore, is not right in its finding that the burden was on the Revenue to prove that the profits derived by the sale of the specified goods were utilised for charitable purpose. The question, then is, whether the assessee should utilise the profits in the relevant assessment year itself. The Government in their subsequent notif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ose, even after the expiry of the relevant year. But, however, before the assessment order is passed, there should be proof that the profits derived in the relevant assessment year have been solely utilised for charitable purpose. The direction in the later notification to set apart the profits for charitable purpose would become meaningful when we adopt the above interpretation and at the same time the object of the notification gets achieved. It is then contended that the appellant had utilised the profits derived by the sale of the books in the relevant assessment year to purchase stock-in-trade and it is not charitable purpose. Shri Nambiar has drawn our attention to the contention of the appellant itself before the appellate authorit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... apart for that purpose and utilised before the assessment is made by the Sales Tax Officer gets exempted. On the assessee's failure to prove the same, the rest of the profits, in other words the assessable turnover is exigible to sales tax. Shri Ramachandran contended that at the relevant time, the focus was on the basis of the object of the articles of the trust of the assessee that they were entitled to utilise the profits derived by the sale of the books in acquiring the stock-in-trade also. The necessary material has not been placed and that, therefore, an opportunity may be given to the appellant to prove that the income derived during the relevant years has been solely utilised for charitable purpose. Since the assessee is seeking an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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