9911796707
TMI Blog2005 (2) TMI 777X X X X Extracts X X X X X X X X Extracts X X X X ..... exemption from turnover tax on the purchase turnover of rubber effected as agents for outside State principals. 2.. Petitioners are acting as buying agents for purchase of rubber in Kerala for their principals located outside the State. Rubber purchased are despatched outside the State and the petitioners are getting reimbursement of purchase price, sales tax borne by them and other expenses incurred and along with it commission. According to the petitioners since commission received by the petitioners is below 1.5 per cent, petitioners are entitled to exemption from turnover tax on the purchase turnover of rubber in terms of Notification S.R.O. No. 1341 of 1987 dated October 8, 1987. The Tribunal following the reported decision of this Court above referred confirmed the disallowance of exemption on the ground that the collections by the petitioners which include reimbursement of sales tax, additional sales tax, surcharge, etc., exceeded 1.5 per cent. It is this order of the Tribunal that is under challenge before us. 3.. The questions raised are specifically against inclusion of sales tax, additional sales tax and surcharge along with commission and other charges based on whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the petitioners, is based on another decision of a division Bench of this Court in Deputy Commissioner of Sales Tax v. Canara Workshop Limited [1994] 95 STC 507 (Ker); 1994 KLJ (TC) 499, which is confirmed by the Supreme Court. Therefore according to him, the decision lays down correct law and the Tribunal rightly followed it. He has also pointed out that the assessees are not entitled to exemption under S.R.O. No. 716 of 1988, which is not considered by the Tribunal. 5.. After hearing counsel on both sides in detail, and after going through the orders of the Tribunal, and that of the authorities below, we feel the Tribunal has committed a grave error in deciding the appeals without reference to the assessment order. Petitioners are admittedly the last purchasers of rubber within the State which are despatched to their principals outside Kerala. All forms of natural rubber are items taxable under the First Schedule to the KGST Act at the point of last purchase in the State. Petitioners have accepted this position and paid sales tax on their purchase turnover. It is to be noted that soon after the introduction of turnover tax under section 5(2A) of the KGST Act by Kerala Fina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /are registered dealer(s) on the rolls of the Sales Tax Office....................(here enter the name of the Sales Tax Office) and I/we have filed our return for the month of.................(here enter the month previous to which the purchase relates) along with proof of payment of turnover tax due for the goods which I/we am/are liable to pay. (Also form containing bill, details of quantity, value and turnover tax paid) From the above notification and S.R.O. No. 715 of 1988 it is clear that turnover tax on rubber was payable from July 1, 1987 to February 18, 1988 by the penultimate purchasers and from February 19, 1988 onwards by the last purchasers of rubber in the State. Even to grant exemption to dealers of rubber at other points of purchase they have to prove payment of turnover tax by the dealer concerned by obtaining and producing declaration and details of payment of turnover tax issued by the dealer who paid turnover tax in the form prescribed under the notification. The validity of the above referred notifications pertaining to turnover tax on rubber and the notification on turnover tax pertaining to spices namely, ginger, arecanut, pepper, and the declarations anne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dealers from whom they purchased rubber and such dealers were entitled and would have been granted exemption from turnover tax based on declarations issued by them. The assessing officer in the assessment for 1989-90 expressed apprehension that the petitioners would have issued declarations to others leading to grant of turnover tax exemption to such dealers. In fact on the officer's query, petitioners refused to confirm whether they have issued declarations in terms of the Notification S.R.O. No. 716 of 1988 entitling other dealers to claim exemption. Eventhough under the definition contained in section 2(viii) of the KGST Act an auctioneer, broker, commission agent, etc., are "dealers", sales tax liability of the agent under the KGST Act is co-extensive with that of principal. This is recognised in rule 9(k)(i) and (ii) of the KGST Rules which exempt an agent from payment of tax when principal pays tax and principal gets exemption when agent pays tax. This is a case where the petitioners have declared themselves as agents of the outside State principals, and they have paid sales tax on the last purchases of rubber without any contest. Since petitioners are the last purchasers of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . As already pointed out by us, the petitioners did not raise any objection when the assessing officer considered turnover tax exemption based on notification S.R.O. No. 716 of 1988. Petitioners have without any dispute paid sales tax on their turnover of last purchases of rubber made for outside State principals and it is also admitted and is on record that the sales tax, additional sales tax, surcharge are reimbursed by the principals to the petitioners. We do not know on what basis the petitioners are demanding a different treatment for the purpose of levy, payment and reimbursement of turnover tax which is also payable by the last purchaser. On the face of it, and in view of the part exemption claimed and obtained by the petitioners in assessment based on declarations produced under Notification S.R.O. No. 716 of 1988, we feel the whole exercise of claim of exemption in appeals before the Tribunal merely based on S.R.O. No. 1341 of 1987 was only speculative, though they could not succeed. 8.. We have already referred to rule 9(k)(i) and (ii) of the KGST Rules whereunder tax liability is borne either by the principal or by agent as the case may be. The position is the same so ..... X X X X Extracts X X X X X X X X Extracts X X X X
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