DY. COMMISSIONER OF SALES TAX (LAW)
BOARD OF REVENUE (TAXEs)
' 7 PADINJARAKARA AGENCIES January 21, 1985 . IP. N. BHAGWATI AND RANGANATH Misra, JJ.]
Serole General Sales Tax Act, Item 71 of First Schedule—Liability 10 “purbhase tax” as last purchase, when artses—Rate of tax enhanced after a certain date—Goods in stock acquired prior to such date and sold subsequently in inter-state-trade or commerce— Whether revised rate of tax applicable.
The respondent-assessee had made certain purchases before 30th June,
’ 1974 and sold them subsequently in the course of inter-state trade or commerce. The rate of purchase tax under Item 71 of the First Schedule to the Kerala Genoral Sales Tax was increased from 3% to 5% with effect from Ist July, 1974. The High Court held that the purchases made by the respondent prior to 30th June, 1974 were taxable at the rate of 3%.
Dismissing the appeal to this Court,
HELD: The assessee could not be made liable to tax on the Purchases made by it prior to 30th June, 1974, unless the purchases acquired the quality of being last purchases in the State. In the instant case there can be no doubt that the assessee became liable to pay tax on the purchases Made by it prior to 30th June, 1974, as soon as it became determined though subsequent to 30th June, 1974, that these purchases were last par chases inside the State and were subsequently exigible to tax. i. o Purchases took place before 30th June, 1974, the assessee would e - = be taxed at the rate of 3% which was prevailing at the time when the Purchases were made, [852F-H; 853B.
State of Madras v. T. Narayanaswami Naidu & Anr., [1967] 3 S.CR. 622, referred to. .C. 256, approved,
Seaso Rubbers v. State of Karala, 48 8.T ) ivil Appeal No. 4160 of
Civ. AppettaTe Jurispicrion: ©
' ae ee
= hea ic remanence:
852 SUPREMB COURT REPORTS
From the Judgment and Order dated 25.6.1984 Of the High Court in T.R.C. No. 19 of 1984. Keraly -V. J. Francis for the Appellant.
TM. Ansari, Markose Vellapally and D.N. Misra for th Respondent. :
The Judgment of the Court was delivered by
Buacwati, J. The sole question which arises for determination . | in this appeal is as to what is the rate at which the goods which hag - | been purchased earlier and which were in stock with the assessee on
30-6-74 were assessable to purchase tax when the purchases were ~ .
found to be last purchases as a result of events which took place subsequent to 30.6.1974. This question has become material since the tate of purchase tax was increased from 3% to 5% with effect from
Ist July, 1974. Now itis noi disputedin the present case that the.
purchases of goods effected by the assessee prior to 30-6-74 were last purchases within the State because the goods purchased which were in stock on 30-6-74 were subsequently sold by the assessee in the course of inter-state trade orcommerce which means that they were not sold within the State and hence the assessce was clearly the last purchaser within the State and as such was liable to pay purchase tax under Jtem 71 of the First Schedule to the Kerala General Sales Tax ©
Act. Equally it is clear that the assessee could not be made liable to tax on the purchases made by it prior to 30th June 1974, unless the purchases acquired the quality of being last purchases in the State. It was pointed out by this Court in State of Madras v. Shri T- Nara- yanaswami Naidu & Anr.4) when the assessce “files a return and .
declares the stock in hand, the stock in hand cannot be said to have been acquired by last purchase because he may still during the next the goods before the f the stock ts it may OF assessment year, sell it or he may consume it himself or may be destroyed, etc. He would be entitled to claim assessing authorities that the character of acquisition 0 in hand was undermined; in the light of subsequent aunt may not become the last purchase inside the State. therefore be no doubt that the assessce in the present case liable to pay tax on the purchases made by it prior to t 1974, as soon as it became determined though subsequent e State June 1974, that these purchases were last purchases inside and were consequently exigible to tax.
trtlawiteninatns ieee tmatee es (1) [1967] 3 s.c.R, 622.
(1985) 5 — e me ner
' ’
C, S. T. vy. PADINJARAKARA AGENCIES (Bhagwati, J.) "853
But the question remains as to what is the rate at which the A assessee was liable to be taxed in respect of these purchases. Since the ~ purchases took place before 30th June 1974, the assessee would, in our opinion, liable to be taxedat the rate prevailing at the time when the purchases were made and since the rate at the time was 3%of the
_sale price, the High Court was right in taking the view that the pur- chases made by the assessee prior to 30th June 1974 were taxableat the B rate of 3%. We may point out that a similar view has been taken by
' the Kerala High Court in Seaso Rubbers v. State of Kerala(*). We .
find ourselves in agreement with the reasoning adopted by the Full Bench of the High Court in that case. ~~
We accordingly reject the appeal but with no order as to costs. C
MLA. ee Appeal dismissed”
“er 9% p a