Kerala High Court
State Of Kerala vs Padmanabha Pada Nair And Sons on 22 August, 2006
Equivalent citations: 2007(1)KLT8, (2007)9VST480(KER)
Author: C.N. Ramachandran Nair
Bench: C.N. Ramachandran Nair, K.M. Joseph
JUDGMENT C.N. Ramachandran Nair, J.
1. The question raised is whether theft of an article after purchase will entitle the assessee for exemption from payment of tax in respect of the commodity which is taxable at the point of last purchase in the State. The item in this case is rubber which is taxable at the point of last purchase in the State. The loss through theft is from respondent's godown after the item was purchased. Contention of respondent is that the item has not acquired the quality of last purchase, as it would have been sold again, had the theft not taken place in the State. The tribunal accepted this contention and allowed the appeal against which this S.T. Rev. Case is filed by State.
2. We have heard counsel for the respondent/assessee and the Special Government Pleader. We are unable to follow the logic applied by the Tribunal because once the goods are lost from the custody of the respondent, it is not available for re-sale by the dealer and so much so, the goods acquired the quality of last purchase when it is lost from the custody of the assessee. This Court has, in the decision in T.R.C. No.39/03 dated 7.2.2003, held that goods lost on account of fire will attract tax in the hands of dealer, if it is an item taxable at last purchase point. Loss of goods in fire and in theft has the same consequence for the purpose of levy of tax, if the commodity is taxable at the point of last purchase. Even though counsel for respondent pointed out that loss in fire is permanent and loss in theft is not so, we do not think that the argument is acceptable because if the lost goods are retrieved, there is no need for the assessee to pay another tax on the same commodity and it will be possible to account the retrieved goods and avoid double taxation. However, if goods are not retrieved by the assessee, the position is the same as that of loss in fire. Therefore, we are of the view that the item when lost acquires the quality of last purchase and tax is rightly levied on the respondent/assessee as the goods, namely rubber, is taxable at the point of last purchase in the State. We, therefore, allow the S.T. Rev., reverse the order of the Tribunal and restore the assessment on the turnover of lost goods.