LexBABY VARGHESE versus STATE OF KERALA
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[2008] 11 S.C.R 749 ~ BABv VARGHESE A v. STATE OF KERALA (CIVIL APPEAL No. 4752 of 2008) AUGUST 1, 2008 B -~ [S.8. SINHA AND CYRIAC JOSEPH, JJ.] Kera/a General Sales Tax Act, 1963 - s. 5A, First Sched- ule Entry 83 - Aluminium scrap and old utensils and vessels - Purchase turnover of- Held: Is taxable under Entry 83 since c the assessee deals in metal scrap - It purchases old alu- minium vessels which are pressed to convert the same as scrap - Order of tribunal that Entry 5 dealing in aluminium household utensils is attracted cannot be upheld - Tribunal erred in construing the relevant 'Entry' - However, matter re- D mitted to Assessing Authority for consideration of the ques- ..,,. tion if sales tax has been paid on the article or not . The question which arose for consideration in this appeal was whether 'purchase turnover' of aluminium scrap and old utensils and vessels is taxable at the rate E provided under Entry 83 of the First Schedule of the Kera la General Sales Tax Act, 1963. Disposing of the appeal, the Court HELD: 1.1 Appellant is a dealer under the Kerala Gen- F ,.. eral Sales Tax Act, 1963. It deals in purchase and sale of aluminium household utensils. It entrusts the said uten- .. sils to another unit for manufacture of new aluminium vessels on job work basis. [Para 8] [755-D] 1.2 A finding of fact has been arrived at by the Tribu- G nal that the appellant used to purchase old aluminium vessels and scrap which were used for conversion to new aluminium household utensils. Old aluminium vess.els are pressed to convert the same as scrap. Thus, the appel- 749 H 750 SUPREME COURT REPORTS [2008] 11 S.C.R. A lant is a scrap dealer and not a dealer in aluminium ves- sels within the meaning of Entry 5. The dictionary mean- ing of "scrap" is 'a small piece or amount of something especially one that is left over .after the greater part has been used or material, especially metal, discarded for re- B processing'. [Para 9] [755-E-F] 1.3 The Entries contained in the First Schedule ap- pended to the Act are in three parts. Entry 5 deals in alu- minium household utensils. Entry 6 deals with aluminium products and products of aluminium alloys and Entry 83 C deals with metal scraps. Indisputably, aluminium metal _ scraps would also come within the purview of Entry 83. As the app~llant deals in metal scrap, its case will come within in the purview of Entry 83. All aluminium products do not come within the purview of Entry 5. It deals with o only domestic utensils. For other aluminium products, a different rate of tax has been prescribed in Entry 6. If there exists an entry which covers the goods in question, by necessary implication, the same would be considered to have been excluded from another entry; [Para 1 O] [755-G- E H; 756-A-B] 1.4 Entry 5 is capable of two interpretations. It may be read in the manner in which the Tribunal did, but it can also be read as "household utensils made up of alu- minium or aluminium alloys". Use of the word "aluminium" F at the beginning may be superfluous. In any event, the appellant cannot be said to be dealing with aluminium household utensils or household utensils made up of alu- minium and aluminium alloys. Therefore, it was Entry 83 which is attracted to the facts of the instant case. [Para G 10] [756-C-D] 1.5 In the instant case, the tribunal committed a mani- fest error in construing the relevant 'Entry'. It failed to take into consideration the· principles governing the interpre- tation of a taxing statute. On technical grounds, the H Tribunal's view cannot be upheld. Entry 5 speaks of uten- BABY VARGHESE v. STATE OF KERALA 751 [S.B. SINHA, J] sils and not scraps made out of old utensils. They are two A different commodities coming under two different entries. [Para 12] [756-F-G] 1.6 There is no legal infirmity in the judgment of the High Court. However, in view of the stand taken by the parties that if sales tax has been paid on an article, pur- B chase tax cannot be levied thereupon. However, the same involves determination of pure questions of fact. As the said question of fact has not been gone into by the As- sessing Authority, the matter is remitted to the Assessing Authority for consideration of the said question afresh. C [Para 13] [756-H; 757-A-B] Berger Paints India Ltd. v. Commissioner of Income Tax, Calcutta 2004 (12) SCC 42 - referred to. Case Law Reference 2004 (12) SCC 42 Referr
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