9911796707
TMI Blog2005 (5) TMI 625X X X X Extracts X X X X X X X X Extracts X X X X ..... s and circumstances of the case, the Sales Tax Appellate Tribunal was justified in sustaining assessment of purchase tax under section 5A of the Kerala General Sales Tax Act, 1963 on the turnover of local purchase of cashew kernels by the assessee from unregistered dealers which were sold to exporters within and outside Kerala for export to foreign buyers? We have heard counsel appearing for the petitioner and Government Pleader appearing for the respondents. On going through the orders of the Tribunal we find that the second appeals filed by the assessee on the above question were rejected by the Tribunal following the decision of the Supreme Court in State of Karnataka v. B.M. Ashraf & Co. reported in [1997] 107 STC 571. However, the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said decision is rendered without referring to the Supreme Court decision and in view of the binding nature of the decision of the Supreme Court under article 141 of the Constitution of India, this court has to follow the same and reject the revisions filed by the assessee. If the decisions of this court are not consistent with the law declared by the Supreme Court, then we cannot follow such decisions of this court for the sake of consistency as we are bound by law laid down by the Supreme Court. On going through section 6 of the Karnataka Sales Tax Act we find the provisions are same as that of section 5A of the KGST Act. Therefore, if the facts, based on which Supreme Court has rendered the above decision, are the same as the facts in p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chase of which is liable to tax under this Act, in circumstances in which no tax is payable under sub-sections (1), (3), (4), or (5) of section 5 and either-- (a) consumes such goods in the manufacture of other goods for sale or otherwise; or (b) uses or disposes of such goods in any manner other than by way of sale in the State; or (c) despatches them to any place outside the State except as a direct result of sale or purchase in the course of inter-State trade or commerce, shall, whatever be the quantum of the turnover relating to such purchase for a year, pay tax on the taxable turnover relating to such purchase for the year at the rates mentioned in section 5." On the face of it, the argument of the petitioner is impressive be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spect of the question is whether the purchase from unregistered dealers of goods which are sold to exporters located outside the State is exempted by virtue of section 5A(1)(c) of the KGST Act. While the petitioner's contention is that the Supreme Court has not considered the scope of purchase tax liability on local purchase of goods from unregistered dealers which are sold to exporters outside the State, the Government Pleader argued that the above referred decision in B.M. Ashraf's case [1997] 107 STC 571, applies to inter-State sales also because according to him, if section 5(3) sale made locally to an exporter is not a "sale in the State" as held by the Supreme Court, then there is no justification to hold that sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xable under section 6(1) of the CST Act but for the exemption provided under the proviso to the section. However, the question is whether the inter-State sales which are deemed export sales under section 5(3) of the CST Act, are intended to be covered by clause (c) of section 5A(1) of the KGST Act. We feel the exception provided to interState sales under section 5A(1)(c) does not take in deemed export sales falling under section 5(3) of the CST Act. This is because section 5A is a charging section and not an exemption provision. Clauses (a) and (b) of section 5A(1) are only exceptions to the charging section. The object of section 5A is to bring to tax transactions in goods on which tax would not be levied under the main charging section, n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 5(3) is to grant exemption only to the last sale or purchase preceding the actual export, i.e., the export sale falling under section 5(1) of the CST Act. An exception clause to the charging section under section 5A(1)(c) has to be interpreted with reference to the scheme of exemption provided under section 5(3) of the CST Act and a harmonious construction of the two provisions goes to establish beyond doubt that the exception provided under section 5A(1)(c) of the KGST Act is not intended to enlarge the scope of section 5(3) and so much so, exemption from purchase tax under section 5A(1)(c) applies only if the inter-State sale made subsequent to the purchase is taxable. In other words, the inter-State sale referred to in section 5A(1)(c) ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
