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TMI Blog2004 (4) TMI 552X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee the rate of tax on timber applicable to the inter-State transaction unsupported by C form is only 10 per cent since the tax under the Kerala General Sales Tax Act, 1963, is only 2.5 per cent at the hands of the petitioner. However, this was not accepted by the assessing authority. He levied tax at 13.75 per cent. In appeal filed by the assessee the first appellate authority held that the rate of tax applicable in the instant case is 12.5 per cent as against 13.75 per cent adopted by the assessing authority. In further appeal by the assessee the Sales Tax Appellate Tribunal accepted the contention of the assessee that since the rate of tax leviable on timber is only 2.5 per cent plus surcharge the correct rate to be applied on in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s applicable. The counsel further submitted that the respondent had purchased timber only from the Forest Department of the Government after paying the tax at the first point of sale and therefore the respondent's liability in the State was only for the last point sale at 2.5 per cent. The counsel on that basis submitted that when section 8(2A) of the Act says that the tax payable under the Act by a dealer on his turnover in so far as the turnover or any part thereof relates to the sale of any goods, the sale or, as the case may be, purchase of which is, under the sales tax law of the appropriate State, exempt from tax generally or subject to tax generally at a rate which is lower than 4 per cent, shall be nil or, as the case may be, shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s higher; and for the purpose of making any such calculation any such dealer shall be deemed to be a dealer liable to pay tax under the sales tax law of the appropriate State, notwithstanding that he, in fact, may not be so liable under that law." "5. Levy of tax on sale or purchase of goods. (1) Every dealer (other than a casual trader or agent of a non-resident dealer) whose total turnover for a year is not less than two lakh rupees and every casual trader or agent of a non-resident dealer, whatever be his total turnover for the year, shall pay tax on his taxable turnover for that year, ....................... (v) in the case of goods specified in the Fifth Schedule at the rates and at the two points specified against such goods i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e point of last sale in the State by a dealer who is liable to tax under section 5 25 At the point of first sale in the State by a dealer who is liable to tax under section 5 to a person other than a registered dealer or to a registered dealer other than for sale 12.5. " 7.. Admittedly the inter-State sales in question effected by the assessee is not supported by C forms. In cases where the inter-State transaction is covered by C form the transaction is liable to tax only at the rate of 4 per cent as provided under section 8(1)(b). However, under sub-section (2) of section 8 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 inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... leviable under the Central Sales Tax Act the provisions of the local Act are looked into. The aforesaid decision of the Supreme Court is also an authority for the proposition that sales tax law of the State takes in the Kerala Surcharge on Taxes Act, 1957 also. In the instant case the State has not canvassed for the same is evidenced from the fact that the State did not file any appeal against the order of the first appellate authority holding that the rate of tax applicable is only 12.5 per cent and not 13.5 per cent. 9.. Coming to the present case the respondent-assessee is a registered dealer under the K.G.S.T. Act as well as under the Act. It is the case of the assessee that it had purchased timber from the Forest Department of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... remains to be considered is as to whether the assessee is the second seller of timber inside the State. There is no due consideration of this question either by the assessing authority or by the first appellate authority. Both of them went by the fact that what is relevant for the purpose of section 8(2)(b) of the C.S.T. Act is the rate prescribed under the State Act and that since the rate of tax on "timber" under the Act as per the Fifth Schedule is 12.5 per cent (both the points put together) that is the rate which has to be reckoned for the purpose of the tax under section 8(2)(b) of the C.S.T. Act it being higher than 10 per cent. In this view, they did not consider the factual situation. 11.. However, we find that the Tribunal had c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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