Kerala High Court
Deputy Commissioner Of Sales Tax (Law), ... vs Kerala State Co-Operative Consumers ... on 17 October, 1986
Equivalent citations: [1987]64STC394(KER)
Author: K.S. Paripoornan
Bench: K.S. Paripoornan
JUDGMENT T.L. Viswanatha Iyer, J.
1. This tax revision case by the Revenue challenges the order of the Kerala Sales Tax Appellate Tribunal, Additional Bench, Ernakulam, by which they allowed an appeal filed by the respondent and held that levy of sales tax on the sales turnover of confiscated foreign textiles and cigarettes under the Kerala General Sales Tax Act, 1963 ("the Act" in short) was not justified. The respondent is a co-operative society sponsored by the Kerala Government. The main activity of the society is purchase of consumer goods from production centres and distribution of the same to district and primary level co-operative societies for distribution. The respondent-society also sells goods through their own retail shops.
2. The respondent deals in all types of goods such as textiles, cigarettes and other consumer items. Inter alia, they sell goods which are confiscated by the Customs Department of the Government of India, goods which are brought or imported into India unauthorisedly or without proper documents and which are hence confiscated. Such goods confiscated by the Customs Department are sold only to Government sponsored agencies like the respondent. The respondent had thus effected sales of textiles and cigarettes during the assessment year 1973-74 for an amount of Rs. 10,65,247.68. Respondent claimed exemption from payment of tax under the Act in respect of these sales of foreign made confiscated items under Section 9 of the Act read with the Third Schedule thereto. Respondent's contention was that the cigarettes sold by them fell within entry 6 of the Third Schedule to the Act and the textiles sold fell within entry 7 thereof. Entries 6 and 7 of the Third Schedule of the Act read as follows :
6. Tobacco as defined in-item No. 4 of the First Schedule to the Central Excises and Salt Act, 1944.
7. Cotton fabrics, woollen fabrics and rayon or artificial silk fabrics as defined in items Nos. 19, 21 and 22 respectively of the First Schedule to the Central Excises and Salt Act, 1944.
Entries 6 and 7 thus refer to the definition contained in the First Schedule to the Central Excises and Salt Act, 1944,-to item No. 4 therein for tobacco and to items Nos. 19, 21 and 22, for cotton fabrics. That the textile fabrics sold by the respondent were of the description contained in the definition under items 19 21 and 22 of the First Schedule to the Central Excises and Salt Act had not at all been disputed by the assessing authority. In fact before the Tribunal the undisputed case was that the textiles and cigarettes sold by the respondent answered the description of the relevant entries in the First Schedule to the Central Excises and Salt Act, 1944.
3. Inspite of this admitted position the assessing authority purported to levy tax on the sale of these items on the ground that the description of the items in the First Schedule to the Central Excises and Salt Act was applicable only to cigarettes and textiles produced in India in contra-distinction to cigarettes and textiles imported. The case of the Revenue as developed before us, at the hearing was that the definitions in the First Schedule to the Central Excises and Salt Act should be read down to comprehend only items produced in India which had borne excise duty or were dutiable under the said'Act and that since the confiscated items sold by the respondent had not borne excise duty and were not dutiable they did not fall within the scope of the entries in the First Schedule to the Central Excises and Salt Act.
4. We do not see any substance in this contention. Section 9 exempts a dealer who deals in goods specified in the Third Schedule from the payment of tax under the Act. Entries 6 and 7 in the Schedule refer to the definitions in the First Schedule to the Central Excises and Salt Act. The goods, the sale of which is exempted, are described as those mentioned in the items in the First Schedule to the said Act. The Third Schedule to the Act only describes the goods in regard to which the dealer is exempted from payment of tax. When there is no dispute that the dealer has sold goods of that description, he becomes entitled to the exemption under Section 9. All that is required for the operation of Section 9 and the Third Schedule is that the goods sold should answer the description in the corresponding entries in the First Schedule to the Central Excises and Salt Act. The entries in the Third Schedule to the Act are descriptive of the nature of the goods. We are not prepared to read into the said entries or in the definitions in the First Schedule to the Central Excises and Salt Act that the goods should be manufactured in India. That will be adding words to the statutes which are not there.
5. It is not as if this question is res Integra. This Court had occasion to deal with a similar question regarding imported sugar. Sugar as defined in item No. 1 of the First Schedule to the Central Excises and Salt Act is entry No. 5 in the Third Schedule to the Act. This Court was faced with the very same question whether imported sugar is comprehended within the said entry. This Court held that the entries in the Third Schedule had been used only as a legislative device for the limited purpose of economy of words and refused to read the words "in India" into the definition in item 1 of the First Schedule to the Central Excises and Salt Act. (vide State Trading Corporation of India Ltd. v. Assistant Commissioner 1985 KLT 973. This decision is on all fours with the present case. We are in agreement with the same.
The tax revision case is, therefore, dismissed in limine.
Immediately after pronouncement of the judgment, the Senior Government Pleader sought for certificate under Article 133(1) of the Constitution to appeal to the Supreme Court. We are of the opinion that this case does not involve any substantial question of law of general importance, which needs to decided by the Supreme Court. We therefore, decline to grant the certificate sought for by the Senior Government Pleader.