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TMI Blog1986 (2) TMI 332X X X X Extracts X X X X X X X X Extracts X X X X ..... y. They effect sales locally as well as inter-State and also export rose wood and ivory articles for sale outside India. The questions raised in these revision cases relate to the validity of assessment under section 5A of the Kerala General Sales Tax Act, 1963 in regard to (1) ivory purchased from the Travancore Devaswom Board (2) the purchase value of packing materials and (3) the purchase value of finished articles locally purchased and exported to countries outside India. The statutory authorities have held that the purchase turnover in regard to these items is exigible to tax under section 5A of the Act. 3. The assessment relates to periods prior to the commencement of the Sales Tax Amendment Act, 19 of 1974. The Travancore Devaswo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e State in raw form, the purchase value will be exigible to tax under section 5A as the assessee has no case that it was sold in the course of inter-State trade or commerce. We are, therefore, clearly of the view that the purchase turnover of ivory except to the extent of the quantity sold within the State is exigible to tax under section 5A of the Act. The statutory authorities below have found that the packing materials purchased by the assessee are exigible to tax under section 5A of the Act. A Full Bench of this Court in the decision reported in Deputy Commissioner of Sales Tax v. Raja Oil Mills [1979] 43 STC 78 (FB) in considering the question as to whether purchase turnover of gunny bags used for the purpose of packing copra is exigib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terials used for export and for consignment sale outside the State have not suffered tax at any point and the purchase turnover to that extent is exigible to tax under section 5A as it falls squarely under clause (c) of sub-section (1) to the extent the sale is not as a direct result of inter-State trade or commerce. To what extent the purchase turnover of packing materials is exigible to tax as aforesaid is not considered by the statutory authorities below and that question will have to be considered afresh in the light of the principles stated above. 5. The next point urged on behalf of the assessee relates to the purchase turnover of manufactured articles locally purchased by the assessee and exported to foreign countries. These arti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ision reported in State of Tamil Nadu v. Kandaswami [1975] 36 STC 191 (SC). The Supreme Court stated thus at page 201: "In our opinion, the Kerala High Court has correctly construed section 5A of the Kerala Act which is in pari materia with the impugned section 7-A of the Madras Act. 'Goods, the sale or purchase of which is liable to tax under this Act' in section 7-A(1) means 'taxable goods', that is, the kind of goods, the sale of which by a particular person or dealer may not be taxable in the hands of the seller but the purchase of the same by a dealer in the course of his business may subsequently become taxable. We have pointed out and it needs to be emphasised again that section 7-A itself is a charging section. It creates a liabil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transfer and exports after deducting the margin earned". The assessing authority was accordingly directed to adopt the figure arrived at by the Appellate Assistant Commissioner on a best of judgment estimation of the purchase turnover of ivory exigible to tax under section 5A. Even though the taxability under section 5A was challenged before the Appellate Tribunal, the assessee had no challenge against the quantum estimated by the Appellate Assistant Commissioner. The result of the foregoing discussion is: the orders of the statutory authorities below are set aside to the extent they relate to levy of purchase tax under section 5A on the packing materials and remit the case to the assessing authority for reconsideration in the light of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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