9911796707
TMI Blog2006 (6) TMI 493X X X X Extracts X X X X X X X X Extracts X X X X ..... compounded rate under section 7(1)(a) of the Kerala General Sales Tax Act, 1963. Under this section, a dealer in jewellery could settle his sales tax liability for the year 2000-01 by remittance of 120 per cent of the tax payable by him as conceded in the return or accounts for the immediately preceding year or the tax paid for the said year, whichever is higher, which in this case is 1999-2000. Later the percentage of tax payable at compounded rate was increased from 120 per cent to 150 per cent and thereafter from 150 per cent to 200 per cent of the previous year's tax. Both the petitioners filed applications for payment of tax at compound rate under section 7(1)(a) for the assessment year 2000-01 which were accepted by the officer an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... und rates. Notwithstanding anything contained in sub-section (1) of section 5, any dealer in gold or silver ornaments or wares may, at his option, instead of paying tax in accordance with the provisions of that sub-section, pay tax at 200 per cent of the tax payable by him as conceded in the return or accounts for the immediate preceding year. There is no dispute that the petitioners are dealers in jewellery made of gold and silver and therefore the petitioners are entitled to payment of tax at compound rate under the above provision. But the question is whether by availing the facility of payment of tax at compound rate a dealer in gold or silver ornaments or wares can cover tax liability on other items dealt with by him. In other words ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s referred in section 7(1)(a) of the KGST Act. Therefore according to the counsel no separate tax can be demanded on first sales turnover of bullion in addition to the compounded tax paid for the whole year which according to him covers bullion sales also. The Government Pleader, on the other hand, contended that the payment of tax at compound rate is only in respect of tax payable on gold or silver ornaments or wares and not of standard gold (bullion) which is not gold jewellery or wares. The crucial issue is whether the standard gold (bullion) will come within the expression gold or silver ornaments or wares . Standard gold (bullion) are not defined under the statute but in common parlance standard gold (bullion) is pure gold (24 ct.) an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of separate entries provided for standard gold (bullion) and jewellery and wares, it is clear that standard gold (bullion) is not covered by entry 75. The scheme of payment of tax at compound rate provided under section 7(1)(a) for gold and silver ornaments and wares therefore is in lieu of tax payable for the items under item 75 of the First Schedule to the Act. Even though counsel contended that standard gold (bullion) comes within the description of gold ornaments, it is not acceptable because gold ornaments are articles made of gold and not gold in its pure form which is separately covered by another entry in the Schedule referred above. It is common knowledge that gold ornaments are of 22 carat purity while bullion is 24 carat. In fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oners are more traders in bullion than dealers in jewellery. From the foregoing discussion, I hold that the system of payment of sales tax at compound rate under section 7(1)(a) for jewellery does not cover purchase and sale of standard gold (bullion). Therefore a dealer who opted to pay tax at compound rate for gold and silver ornaments and wares is liable to pay tax in addition to the tax at compound rate at the appropriate rate provided under the Schedule to the Act for the first sales turnover of standard gold (bullion). Therefore the impugned reassessments for 2000-01 and the regular assessment for 2001-02 on the first sales turnover of standard gold (bullion) are confirmed. The counsel for the petitioners contended that if stand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd rate leading to a refund to the petitioner. There is no need for this court to verify the genuineness of the transactions or the correctness of the revised order passed by the assessing officer. However, I make it clear that while reckoning the tax payable in the previous year based on which tax at compound rate is demanded for the subsequent year, the assessing officer has to exclude the tax paid by the petitioner on the first sale of standard gold (bullion). However purchase tax, if any, paid under section 5A on the purchase turnover of standard gold (bullion) used in the manufacture of gold ornaments has to be included as tax paid in the preceding year for the purpose of demand of tax at compound rate for the next year. The next issue ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
