IN THE HIGH COURT OF KERALA AT ERNAKULAM
TRC No. 47 of 1999()
1. DDY.COMMISSIONER (L) COMMERCIAL TAXES
... Petitioner
Vs
1. ASSOCIATED RICE MILLS STORES
... Respondent
For Petitioner :SRI.RAJU JOSEPH, SPL.GOVT.PLEADER(TAX)
For Respondent :SRI.K.C.BALAGANGADHARAN
The Hon'ble the Chief Justice MR.H.L.DATTU
The Hon'ble MR. Justice K.T.SANKARAN
Dated :18/10/2007
O R D E R
H.L.DATTU, C.J. & K.T.SANKARAN, J.
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T.R.C.No. 47 of 1999
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Dated this the 18th day of October, 2007.
O R D E R
H.L.Dattu, C.J.
The only question that arises in this petition for our consideration
and decision is the rate of tax payable in respect of the sales turnover of
V belts and transmission belts.
(2). The assessment year in question is 1990-1991.
(3). The assessee is a registered dealer under the provisions of
the Kerala General Sales Tax Act and Central Sales Tax Act. He is a dealer
in Huller spares, bell bearings, V belts, transmission belts etc. For the
assessment year 1990-91 the assessee had filed its annual returns. The
assessing authority after rejecting the return so filed, has proceeded to pass
best judgment assessment. In the return filed, the assessee had claimed that
the transmission belts are cotton fabrics, and therefore, they would fall under
Entry 7 of Third Schedule to the Kerala General Sales Tax Act and in so far as
V belts are concerned, the stand of the assessee is that though it contains
65% of rubber, the same cannot be treated as rubber product which would fall
under Entry 7 of the Fifth Schedule.
(4). The reasoning and conclusion of the assessing authority as
well as the first appellate authority is that the goods dealt by the assessee are
rubber products and they would fall under Entry 7 of Fifth schedule to the
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Kerala General Sales Tax Act, and accordingly, had passed an order treating the
sales turnover of the assessee relating to these items as taxable at second point
sale in the hands of the assessee.
(5). The assessee, being aggrieved by the order so passed by the
assessing authority as well as the first appellate authority had carried the matter
in appeal before the Tribunal in T.A.No.40 of 1993. The Tribunal by its order
dated 15th October, 1998 has allowed the assessee’s appeal and in that has
observed as under:
” I have heard both sides. The only question that
emerges for consideration in this second appeal is
whether V belt and transmission beltings are rubber
products or not. The assessing authority as well as the
first appellate authority held the goods to be rubber
products. According to the appellant transmission
beltings are cotton fabrics coming under entry 7 of the 3rd
Schedule to the KGST Act as major constituant of the
same is Cotton which constitute 65%. Similarly
according to the appellant though V Belt contain 65%
Rubber the same cannot be treated as rubber products
which fall under entry 7 of the 5th Schedule to the KGST
Act. It is seen that the issue has been decided by this
Tribunal in Appeal No.657/91 dt.15th February, 1997 in
the case of the same appellant. As per the order of
Tribunal in T.A.No.657/91 dated 15-2-97 the
transmission beltings was found to be cotton fabrics
falling under entry 7 of the 3rd Schedule and V belt was
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5th Schedule. In the light of the earlier decision of the
Tribunal in the case of the same appellant mentioned
above, I also hold that transmission beltings fall under
entry 7 of 3rd Schedule and V belt falls under entry 7 of
the 5th Schedule. The second appeal is therefore partly
allowed.”
(6). Aggrieved by the said order passed by the Tribunal, the State
is before us, in this tax revision case.
(7). The questions of law raised in this revision petition for our
consideration and decision reads as follows:
(i). Is the Tribunal correct in law in holding that
transmission belts are “cotton fabrics” falling under entry
7 of the 3rd Schedule to the KGST Act?
(ii). Is not on a proper interpretation V Belts and
transmission belts would fall only under entry 7 (rubber
products) under the 5th Schedule to the KGST Act?
(8). Before answering the questions of law raised by the
Revenue, we intend to note that the Tribunal while disposing of TA.No.40 of
1993 for the assessment year 1990-91 has relied upon the orders passed by the
Tribunal in TA.No.657 of 1991 dated 15th February, 1997 for the assessment
year 1989-90.
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(9). The State has accepted the orders passed by the Tribunal in
the sense, that the State has not preferred any appeal against the orders passed
by the Tribunal in T.A.No.657 of 1991 dated 15th February, 1997.
(10). At this stage, it would be relevant to notice the observations
made by the Apex Court in the case of Berger Paints India Ltd. Vs.
Commissioner of Income Tax [ (2004) 266 ITR 99]. In the said decision the
Apex Court has observed as under:
“In view of the judgments of this court in Union of India
v. Kaumudini Narayan Dalal (2001) 249 ITR 219; CIT v.
Narendra Doshi {2002} 254 ITR 606 and CIT v.
Shivsagar Estate {2002} 257 ITR 59, the principle
established is that if the Revenue has not challenged
the correctness of the law laid down by the High Court
and has accepted it in the case of one assessee, then it
is not open to the Revenue to challenge its correctness
in the case of other assessees, without just cause.”
(11). The concept of ‘just cause’ has been explained by the Apex
Court in a subsequent decision.
(12). The assessee in TA.No.657 of 1991 is the very same
assessee in T.A.No.40 of 1993. The assessment year in T.A.No.657 of 1991 is
1989-90. The Tribunal, after detail consideration of the issues involved in that
case, had come to the conclusion that the transmission belts are cotton fabrics
and would fall under Entry 7 of Third schedule to the Kerala General Sales Tax
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Act. That decision of the Tribunal is accepted by the Revenue. In the
subsequent order, the Tribunal, following its earlier decision had allowed the
assessee’s appeal.
(13). In the revision petition filed, the Revenue has not stated
what is the ‘just cause’ which prompted them to prefer a revision petition against
an order passed by the Tribunal against the same assessee for the subsequent
year. In the absence of such an explanation, we cannot entertain this revision
petition filed for the sole reason that the Revenue has accepted the decision
rendered by the Tribunal in the assessee’s own case for the previous
assessment year. In that view of the matter, without going into the merits or
demerits of the case and following the principles laid down by the Apex Court in
the case of Berger Paints India Ltd. Vs. Commissioner of Income Tax
[(2004) 266 ITR 99], this revision petition requires to be rejected and it is
rejected.
Ordered accordingly.
(H.L.DATTU)
CHIEF JUSTICE
(K.T.SANKARAN)
JUDGE
MS
