Supreme Court - Daily Orders
Cryptom Confectioneries Pvt. Ltd. vs State Of Kerela on 20 February, 2014
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IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 2241 OF 2006
|Cryptom Confectioneries Pvt. Ltd. |.. Appellant(s) |
Versus
|State of Kerala |.. Respondent(s) |
O R D E R
1. The appellant is the registered brand owner of ’CRYPTM’. Pursuant to an agreement dated 01.04.1995 entered into between the appellant and the manufacturing company viz. M/s. Bristo Foods Pvt. Ltd., the manufacturing company had license and right to use the appellant’s name ’CRYPTM’.
2. The assessing authority had completed the assessments for the assessment years 1998-1999 and 1999-2000 and had levied sales tax under Section 5(2) of the Kerala General Sales Tax Act, 1963 (for short, "the Act’).
3. Being aggrieved by the order passed by the assessing authority the appellant/assessee preferred appeal before the First Appellant Authority. The First Appellate Authority confirmed the order passed by the assessing authority holding that the appellant was the "registered owner or holder"
of the brand name ’Cryptm’ which are the two conditions for levy of tax under Section 5(2) of the Act.
4. Being aggrieved by the order passed by the First Appellate Authority the appellant/assessee preferred appeal before the Kerela Sales Tax Appellate Tribunal, (for short, "the Tribunal"). The Tribunal vide its order dated 25.05.2004 while partly allowing the appeal has reduced the extent of tax already paid at any previous point of sale.
5. Aggrieved by the order so passed by the Tribunal, the appellant preferred Sales Tax Revision before the High Court. The High Court dismissed the revision petition filed by the appellant/assessee. Being aggrieved by the impugned judgment and order, the appellant/assessee is before us in this appeal.
6. Heard learned counsel for the parties to the lis.
7. The short question that arises for our consideration and decision is the interpretation of Section 5(2) of the Act.
8. Section 5(1) of the Act is the charging Section. It provides for levy of tax on sale or purchase of goods. Section 5(1) of the Act mandates that every dealer other than a casual trader or agent of an non-resident dealer whose total turnover for a year is not less than two lakh rupees and every casual trader or agent of a non-resident dealer, whatever be his total turnover for the year, shall pay tax on his taxable turnover for that year. Section 5(1)(i) speaks of the goods specified in the First or Second Schedule, at the rates and only at the points specified against such goods in the said Schedules. It is an admitted position that the goods manufactured by M/s. Bristo Foods Pvt. Ltd. in the brand name holder, namely the appellant/assessee falls under Item 39 of the First Schedule to the Act. Therefore, it is single point levy and the levy is at the point of sale.
9. Since the interpretation of Section 5(2) of the Act is required, the said section is extracted by us. It reads as under :
"Notwithstanding anything contained in this Act in respect of goods, other than tea sold in auction in the State, which are sold under the trade mark or brand name, the sale by the brand name holder or the trade mark holder within the State shall be the first sale for the purposes of this Act."
In order to attract Section 5(2) of the Act, the following conditions are to be satisfied:
(i) Sale of manufactured goods other than tea;
(ii) Sale of the said goods is under a trade mark/brand name and;
(iii) The sale is by the brand name holder or the trademark holder within the State.
If the above three conditions are satisfied, the sale by the brand name holder or the trade mark holder shall be the first sale for the purpose of the Act.
10. The aforesaid sub-Section commences with a non-obstante clause, i.e., irrespective of Section 5(1) of the Act or any other provision under the Act. The said sub-Section speaks of a sale made by a brand name holder or the trade mark holder within the State. The Legislature deems that such a sale by the brand name holder or the trade mark holder shall be the first sale within the State. In our opinion this is the only possible construction that can be given to sub-Section(2) of Section 5 of the Act. Keeping in view the aforesaid provision, let us once again trace the transaction between the appellant and the licensee, namely, M/s. Bristo Foods Pvt. Ltd.
11. According to the appellant/ assessee who is a branded name holder, M/s. Bristo Foods Pvt. Ltd. has license and is permitted to use the branded name "CRYPTM’. The licensee manufactures the goods, namely, confectioneries and effects supply of sale to the brand name holder. It is the brand name holder, who affects the sale of the confectioneries which are to be taxed as Item 39 of the First Schedule to the Act within the State. Therefore, it is the brand name holder, who has to pay tax under Section 5(2) of the Act. If for any reason M/s.Bristo Foods Pvt. Ltd. has paid the tax while affecting the supply of the manufactured commodity to the appellant/assessee, the appellant/ assessee and M/s Bristo Foods Pvt. Ltd. can approach the authorities for claiming the refund of the tax paid by them.
12. In view of the above, we do not find any infirmity in the impugned judgment and order passed by the High Court. Accordingly, the appeal is dismissed.
Ordered accordingly.
....................J. [ H.L. DATTU ] ....................J. [ A.K. SIKRI ] NEW DELHI, FEBRUARY 20, 2014.
ITEM NO. 106 COURT NO.3 SECTION IIIA
S U P R E M E C O U R T O F I N D I A
RECORD OF PROCEEDINGS
CIVIL APPEAL NO(s). 2241 OF 2006
CRYPTOM CONFECTIONERIES PVT. LTD. Appellant (s)
VERSUS
STATE OF KERELA Respondent(s)
Date: 20/02/2014 This Appeal was called on for hearing today.
CORAM :
HON’BLE MR. JUSTICE H.L. DATTU
HON’BLE MR. JUSTICE A.K. SIKRI
For Appellant(s) Mr. Ritin Rai, Adv.
Mr. V.K. Monga,Adv.
For Respondent(s) Mr. M.T. George, Adv.
Ms. Kavitha K.T., Adv.
UPON hearing counsel the Court made the following O R D E R The appeal is dismissed in terms of the signed order.
| [ Charanjeet Kaur ] | | [ Vinod Kulvi ] |
|Court Master | |Asstt. Registrar |
[ Signed order is placed on the file ]