IN THE HIGH COURT OF KERALA AT ERNAKULAM
TRC No. 500 of 2001()
1. M/S.P.K. UTHIPPU
... Petitioner
Vs
1. STATE
... Respondent
For Petitioner :SRI.C.K.THANU PILLAI
For Respondent : No Appearance
The Hon'ble the Chief Justice MR.H.L.DATTU
The Hon'ble MR. Justice K.T.SANKARAN
Dated :02/07/2007
O R D E R
H.L.Dattu,C.J. & K.T.Sankaran,J.
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T.R.C.Nos.500/2001, 507/2001 & 511 of 2001
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Dated, this the 2nd day of July 2007
ORDER
H.L.Dattu,C.J.
T.R.C.No.500 of 2001 arises out of an order passed by the
Sales Tax Appellate Tribunal, Additional Bench-II, Palakkad in T.A.No.198 of
1997 dated 23rd January, 2001 for the assessment year 1987-88.
T.R.C.No.507 of 2001 arises out of the order passed in T.A.No.199 of 1997
dated 23rd January, 2001 for the assessment year 1988-89, while
T.R.C.No.511 of 2001 arises out of the order passed in T.A.No.202 of 1997
dated 23rd January, 2001 for the assessment year 1991-92 by the same
Tribunal.
2. In all these Tax Revision Cases, parties are common. Issues
raised are also common. Therefore, they are clubbed together, heard and
disposed of by this common order.
3. The assessee is a dealer registered both under the Kerala
General Sales Tax Act (“KGST Act” for short) and Central Sales Tax Act (“CST
Act” for short). He is doing business in arecanut. He purchases arecanut from
unregistered dealers and effect consignment sales. In the annual return filed,
the assessee had claimed exemption from payment of turnover tax under
Section 5(2A) of the KGST Act relying upon the notification issued by the State
Government in No.SRO.717/88. The assessing authority has rejected the said
claim solely on the ground that the assessee has not produced the declaration
form prescribed under the notification for the purpose of claiming exemption
under the notification. The view of the assessing authority is accepted by the
first appellate authority as well as the Tribunal in the appeals filed by the
TRC Nos.500, 507 &
511 of 2001 – 2 –
assessee. The Tribunal in its order after extracting the notification issued by
the State Government has come to the conclusion that if for any reason the
petitioner seeks exemption from payment of turnover tax under the Act by
virtue of the notification issued by the State Government in No.SRO.717/88, he
is expected to produce the declaration form prescribed under the notification or
at least satisfactory evidence to suggest that arecanut has suffered tax at the
earlier stages of sale or purchase.
4. Sri.C.K.Thanu Pillai, the learned counsel appearing for the
assessee, by relying upon a decision which has been dissented by this Court
subsequently, would contend that since the petitioner is the last purchaser in
the State, insistence of the production of the prescribed declaration form is
wholly unnecessary. The reliance is on the decision of a Division Bench of this
Court in M/s.P.I.Varghese & Sons v. State of Kerala [(2002) 10 KTR 157 (Ker).
5. Per contra, learned counsel appearing for the State
Government would submit that it is mandatory on the part of the assessee in
order to claim exemption from payment of turnover tax under notification SRO
No.717/88 that he shall either produce a declaration form prescribed under the
notification or satisfactory evidence to the effect that at some point of sale or
purchase turnover tax has already been paid.
6. In Refeeque Enterprises v. State of Kerala [2006 (1) KLT
207), the assessee was also a dealer in arecanut. The assessment year in
question was 1991-92. He was the last purchaser in the State. He had also
claimed exemption from payment of turnover tax under the notification
No.SRO.717/88, but had not produced the declaration form from the dealer
who paid the turnover tax or any other evidence in support of the case that the
turnover tax had been paid.
TRC Nos.500, 507 &
511 of 2001 - 3 -
7. The Court after relying upon the observations made by the
apex Court in State of Punjab & Ors. v. Punjab Fibres Ltd. & Ors., [(2005) 139
STC 200] has stated as under:
“We have no hesitation to say that filing of declaration is a
mandatory requirement applying the principle laid down by the
apex court in Punjab Fibres Ltd.’s case. We are therefore unable
to subscribe the view of the Division Bench in P.I.Varghese’s
case especially, in the light of the decision of the Supreme Court
in Punjab Fibres Ltd.’ case. Assuming a liberal approach can be
made as stated in Gangadharan v. Addl.S.T.O., 1993 KLJ (Tax
Cases) 432 and in Thomas Varghese’s case [1994 KLJ (Tax
Cases) 37] that in the absence of a declaration, satisfactory
evidence could be adduced in lieu of the declaration, no
satisfactory evidence has been adduced by the assessee in the
present case”.
8. In the instant case also, the assessee has not produced any
declaration form as provided in the notification; nor has he produced any
evidence as required under the notification. In the absence of the appropriate
declaration form or any evidence in lieu of the same, in our opinion, the
Tribunal was justified in rejecting the request of the assessee for exemption
from payment of turnover tax under Section 5(2A) of the Act. In that view of the
matter, the question of law raised by the assessee in the memorandum of Tax
Revision Cases requires to be answered in the negative and against the
assessee and in favour of the Revenue.
Ordered accordingly.
H.L.Dattu
Chief Justice
K.T.Sankaran
Judge
vku/-