P.D.Jose Vs. The Commercial Tax officer and Others - Court Judgment

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR. JUSTICE A.K.JAYASANKARAN NAMBIAR TUESDAY, THE16H DAY OF DECEMBER201425TH AGRAHAYANA, 1936 WP(C).No. 23841 of 2009 (A) ---------------------------- PETITIONER(S): -------------------------- P.D.JOSE, PROPRIETOR, M/S.PARACKAL AGRO MILLS, KANJOOR P.O. KALADY. BY ADVS.DR.K.B.MUHAMED KUTTY (SR.) SRI.K.M.FIROZ RESPONDENT(S): ---------------------------- 1. THE COMMERCIAL TAX OFFICER, ANGAMALY, (FORMERLY ADDITIONAL SALES TAX, OFFICER-I ANGAMALY).

2. THE KERALA SALES TAX APPELLATE TRIBUNAL, ADDITIONAL BENCH-II, ERNAKULAM, REPRESENTED BY ITS ASSISTANT SECRETARY.

3. THE DEPUTY COMMISSIONER (APPEALS), OFFICE OF DEPUTY COMMISSIONER(APPEALS), IV FLOOR SALES TAX COMPLEX, PERUMANOOR, ERNAKULAM. (FORMERLYAPPELLATE ASSISTANT COMMISSIONER). R,R3 BY ADV. SRI.R.ARUN RAJ R BY GOVERNMENT PLEADER SMT.LILLY.K.T. THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON1612-2014, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P.(C).NO.23841/2009 APPENDIX PETITIONER'S EXHIBITS: EXT.P1: COPY OF THE ASSESSMENT ORDER

FOR THE YEAR200102 DATED282.2004. EXT.P2: COPY OF THE ASSESSMENT ORDER

FOR THE YEAR200203 DATED282.2004. EXT.P3: COPY OF THE COMMON FIRST APPEAL ORDER

S DATED188.2004 FOR THE YEARS200102 AND200203. EXT.P4: COPY OF THE COMMON SECOND APPEAL ORDER

PASSED BY THE SECOND RESPONDENT FOR THE YEAR200102 AND200203 DATED318.2005. EXT.P5: COPY OF THE RECTIFICATION PETITION FILED BY THE PETITIONER IN T.A.NO.699/2004 DATED NIL. EXT.P6: COPY OF THE COMMON ORDER

ON THE RECTIFICATION PETITIONS PASSED BY THE SECOND RESPONDENT FOR THE Y EAR200102 AND200203 DATED1811.2008. EXT.P7: COPY OF THE SUPREME COURT JUDGMENT

IN C.A.NO.4406/06 DATED203.2007. EXT.P8: COPY OF THE ORDER

OF THE SUPREME COURT IN C.C.NO.4406/06 DATED203.2007. EXT.P9: COPY OF THE TRIBUNAL ORDER

IN R.A.NOS.2/2008 IN T.A.NO.750/04 DATED3010.2008. RESPONDENTS EXHIBITS: NIL //TRUE COPY// P.A. TO JUDGE A.K.JAYASANKARAN NAMBIAR, J.

............................................................. W.P.(C).No.23841 of 2009 ............................................................. Dated this the 16th day of December, 2014

JUDGMENT

The petitioner is a registered dealer on the files of the 1st respondent. During the assessment years 2001-2002 and 2002- 2003, he had effected purchase of paddy from local unregistered dealers for the purposes of milling and conversion to rice, which was subsequently sold. In the assessments that were completed against the petitioner for the said years, the assessing authority levied purchase tax, under Section 5A of the Kerala General Sales Tax Act, on the purchase of paddy from unregistered dealers. Thereafter, the sales turnover of rice sold by the petitioner was also subjected to the levy of sales tax under Section 5 of the Kerala General Sales Tax Act. While computing the tax liability of the petitioner, however, the assessing authority did not give a set off to the tax paid on procurement of paddy, while computing the tax payable on the turnover of rice. The petitioner, therefore, preferred an appeal before the 1st Appellate Authority who allowed the appeals by permitting the petitioner the benefit of set off of the tax paid on paddy, against the tax to be paid on the sales turnover of rice. In further appeals preferred by the Department before the Appellate Tribunal, the Appellate Tribunal, relying on the decision W.P.(C).No.23841 of 2009 2 of the Supreme Court in State of Kerala v. Vattukulam Chemicals Industries [(2002) (10) KTR69(SC)] found that the petitioner was liable to be assessed under Section 5A of the Kerala General Sales Tax Act and, further, that being an SSI unit it was not entitled for the set off of tax levied under Section 5A of the Kerala General Sales Tax Act against the payment of tax on the rice sold by him. Although the petitioner preferred a rectification application before the Appellate Tribunal, the same was dismissed by the Tribunal by Ext.P6 order dated 18.11.2008. In the writ petition, the petitioner impugns Ext.P4 appellate order of the Tribunal, as well as Ext.P6 order passed by the said Tribunal in the rectification petition preferred by the petitioner.

2. I have heard Sri.K.B.Mohammed Kutty, the learned Senior counsel appearing on behalf of the petitioner as also Smt.K.T.Lilly, the learned Government Pleader appearing on behalf of the respondents.

3. On a consideration of the facts and circumstances of the case as also the submissions made across the Bar, I find that while passing Exts.P4 and P6 orders, in the appeal preferred by the Department and the rectification petition preferred by the W.P.(C).No.23841 of 2009 3 petitioner before it, the Appellate Tribunal has not considered the decision of the Supreme Court in the case of M/s.Peekay Re- Rolling Mills (P) Ltd v. Assistant Commissioner (assessment) [2006 (2) KLT687 wherein the Supreme Court, while considering the issue of whether tax could be levied under Section 5A on purchasers of declared goods that were exempted at the point of first sale within the State, found that insofar as the levy of purchase tax on the said goods would have the effect of shifting the point of levy on declared goods, from the point of first sale to the point of first purchase, it would violate the express provision of Section 15 of the Central Sales Tax Act, 1956 as it stood prior to its amendment with effect from 11.05.2002. The effect of the said decision of the Supreme Court, to purchases of paddy effected by dealers in rice from unregistered dealers/exempted dealers of paddy, has been considered in a recent Full Bench judgment of this Court dated 03.12.2014 in S.T.Rev.Nos.4 & 5 of 2012. In the light of the aforesaid judgment, it is clear that the petitioner cannot be mulcted with a liability to purchase tax in respect of paddy purchased by him during the assessment year 2001-2002. As regards the assessment year 2002-2003, the liability to purchase tax on the procurement of paddy would depend upon the provisions of Section 15 as it stood after its amendment with effect from W.P.(C).No.23841 of 2009 4 11.05.2002, and the decision of the Supreme Court in Peekay Re- Rolling Mill's case would have no application. These are matters that have to be considered by the Appellate Tribunal while deciding the appeals preferred by the State for the assessment years 2001- 2002 and 2002-2003. In order to enable the Appellate Tribunal to have a fresh look at the matter for these two assessment years in respect of the petitioner, I quash Exts.P4 and P6 orders of the Appellate Tribunal to the extent it decides the appeals preferred by the State for the assessment years 2001-2002 and 2002-2003 and direct the Appellate Tribunal to pass fresh orders in the matter, taking note of the decisions aforementioned, and after hearing the petitioner, within a period of two months from the date of receipt of a copy of this judgment. The writ petition is disposed of as above. A.K.JAYASANKARAN NAMBIAR JUDGE mns W.P.(C).No.23841 of 2009 5