Kerala High Court
Deputy Commissioner Of Sales Tax (Law), ... vs Kunhalavi And Co. on 23 January, 1987
Equivalent citations: [1987]66STC100(KER)
Author: T.K. Kochu Thommen
Bench: T.K. Kochu Thommen
JUDGMENT T.K. Kochu Thommen, J.
1. The question which arises in this case is whether rafters, beams, planks and the like are articles different from timber logs. Section 5A of the Kerala General Sales Tax Act, 1963, says:
5A. Levy of purchase tax.-(1) Every dealer who, in the course of his business, purchases from a registered dealer or from any other person any goods, the sale or purchase of which is liable to tax under this Act, in circumstances in which no tax is payable under Section 5 and either-
(a) consumes such goods in the manufacture of other goods for sale or otherwise; or
(b)...
(c)...
shall, whatever be the quantum of the turnover relating to such purchase for a year, pay tax on the taxable turnover relating to such purchase for the year at the rates mentioned in Section 5.
(2)...
(3)...
If Clause (a) is not satisfied, that is, if the goods are not consumed in the manufacture of other goods for sale or otherwise, they are not liable to be charged under Section 5A. The contention of the Revenue is that rafters, planks, beams, etc., are, as stated by this Court in Kuttirayin & Co. v. State of Kerala 1976 KLT 442, different commercial articles from timber logs and are therefore liable to be taxed under Section 6A. Admittedly the dealer purchased timber logs and cut them into rafters, planks, beams, sizes, scantlings, etc. If by such activity, the original goods, namely, timber logs, were converted into different commodity, Section 6A would be attracted. It was so held by this Court in the aforesaid decision, but the Supreme Court construing Section 8 of Orissa Sales Tax Act stated in State of Orissa v. Titaghur Paper Mills Co. Ltd. [1985] 60 STC 213 that rafters, planks, beams and the like were the same commodity as timber logs. Section 8 of the Orissa Sales Tax Act reads:
8. Power of the State Government to prescribe points at which goods may be taxed or exempted.-Notwithstanding anything to the contrary, in this Act, the State Government may prescribe the points in the series of sales or purchases by successive dealers at which any goods or classes or descriptions of goods may be taxed or exempted from taxation and in doing so may direct that sales to or purchases by a person other than a registered dealer shall be exempted from taxation:
Provided that the same goods shall not be taxed at more than one point in the same series of sales or purchases by successive dealers.
...
With reference to the proviso to Section 8, the Supreme Court stated:
A question which remains is whether beams, rafters and planks would also be logs or timber. The Shorter Oxford English Dictionary defines 'beam' inter alia as 'a large piece of squared timber, long in proportion to its breadth and thickness' and the Concise Oxford Dictionary defines it as a 'long piece of squared timber supported at both ends, used in houses, ships, etc' and according to Webster's Third New International Dictionary, it means 'a long piece of heavy often squared timber suitable for use in house construction'. A beam is thus timber sawn in a particular way. 'Rafter' as shown by the Shorter Oxford English Dictionary is nothing but 'one of the beams which give slope and form to a roof and bear the outer covering of slates, tiles, thatch; etc.'. The Concise Oxford Dictionary and Webster's Third New International Dictionary define 'rafter' in very much the same way; the first defines it as 'one of the sloping beams forming framework of a roof and the second as 'one of the often sloping beams that support a roof. Rafter would also, therefore, be timber or log put to a particular use. A 'plank' is defined in Shorter Oxford English Dictionary as 'a long flat piece of smoothed timber, thicker than a board, specially a length of timber sawn to a thickness of from two to six inches, a width of nine inches or more and eight feet or upwards in the length'. According to the Concise Oxford Dictionary it is a 'long wide piece of timber, a few inches thick' and according to Webster's Third New International Dictionary, it is 'a heavy thick board that in technical specifications usually has a thickness of 2 to 4 inches and a width of at least 8 inches'. The exact thickness and width of a plank may be of importance in technical specifications but in ordinary parlance planks would be flattened and smoothed timber. Such flatness and smoothness can only be achieved by using a saw and other implements required for that purpose. The same would be the case when timber is rounded or shaped. The statutory definitions of timber extracted above read along with the meaning of the word 'timber' given in different dictionaries would show that the conclusion reached by the Madhya Pradesh High Court in Mohanlal Vishram v. Commissioner of Sales Tax, Madhya Pradesh, Indore [1969] 24 STC 101 and by the Andhra Pradesh High Court in G. Ramaswamy v. State of Andhra Pradesh [1973] 32 STC 309 is more germane to our purpose than the two Orissa cases neither of which has referred to the statutory definition of the word 'timber' in the relevant statutes. The observation of the Orissa High Court in the case of Krupasindhu Sahu & Sons v. State of Orissa [1975] 35 STC 270 that timber in common parlance in Orissa takes within its ambit only long and big sized logs of wood ordinarily used in house construction as beams and pillars but not when timber is converted into planks, rafters and other wood products like tables and chairs cannot, therefore, be said to be correct so far as planks and rafters are concerned. In our opinion, planks and rafters would also be timber. : [1985] 60 STC 213, 266 (SC).
The above observation is, in our view, applicable with equal force to the consideration of the question whether timber logs are consumed in the manufacture of other goods solely because they are cut into rafters, planks and the like. The answer must necessarily be in the negative. The decision of this Court in Kuttirayin & Co. v. State of Kerala 1976 KLT 442 is, on this point, impliedly overruled by the decision of the Supreme Court in State of Orissa v. Titaghur Paper Mills Co. Ltd. [1985] 60 STC 213. The Tribunal has, in our view, correctly applied the principle stated by the Supreme Court to the facts of this case.
2 In the light of what is stated by the Supreme Court, we hold that the goods in question are not articles different from timber logs and are therefore not liable to be taxed in terms of Section 5A(1)(a). The tax revision case is accordingly dismissed. The parties will bear their respective costs.