LexDY. COMMISSIONER OF SALES TAX (LAW) BOARD OF REVENUE (TAXES) versus PADINJARAKARA AGENCIES
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DY. COMMISSIONER OF SALES TAX (LAW)
BOARD OF REVENU~ (TAXES)
v.
PADINJARAKARA AGENCIES
January 21, -1985
(P. N. BHAGWATI AND RANGANATH MISRA, JJ.J
851
Kerala General Sal~s Tax Act, Item 71 of First Schedui~-Liabili<yro
"purbhase tax" as last purchase, w!ren arises--Rate of tax enhanud aft~r a
ctrtafrr date-Goods in stock acqt.lr~d prlor to such date and sold subrequently
In inter-state-trade or commerce-Whetlter revised rate of tax app/icuble.
The r~spondent-assessec had made certain purchases before 30th Juno,
1974 and sold them subsequently io the course of inter-state trad.: or
commerce.
Tbc rate of purchase tax under Item 71 of the First Schedule
to tbe Kerala Ocnoral Sales Tax was increased from 3% to 5% with effect
from 1st July, 1974.
Tho High Court held that tho 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, unl.:ss the purchases acquired
the quality of bcina last purchases in tbc State,.
In the instant case there
can bo no doubt that tbe assessee became liable to pay tax on the purchases
made by it prior to 30th June, 19 74, as soon as it became determined
though subsequent to 30th June, 1974, that these_ ~urchascs were .last pur.
chases inside tbe State and were subsequently exog1ble to tax. Soncc tbc
PUrchases look place before 30th Juno, 1974, ~~c assessee wo~ld bo h~ble to
be taxed at the rate of 3% which wlls prcva•hng at the lime wbcn tbo
PUrchases were made. {8$2P-H; 8S3B]
State of Madras v. T. NOI'ayauaswamf Naida <h. Anr., (1967] .3 S.C.R.
622, rcr~rred to.
1985.
s~aso Rubbers v. Stat~ of Kamla, 48 S.T.C. 2' 6• approved.
Civ.il Appeal No. 4160 of
CIVIL APPELLATB JUR~'iDICTJON :
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8.52
SUPREME COURT REPORTS
(1985! i S.C.R,•
. From the Judgment and Ord~r dated· 25.6.1984 of the
High Court in T.R.C. No. 19 of l9iS4.
K.crala
,;i)·. PI
- V. J, Fra11cis for the Appellant.
T. M. Ansari, Markose Vellcipally and D. N. Misra for the
Respondent.
The Judgment of the Court was delivered by
BHAGWATI, J. The sole question which arises for determination ..
in this appeal is as to what is the rate at which the goods which had .
been purchased earlier and which were in stock with the assessee on
30-6·74 were assessable to purchase tax when the purchases were -·1
found to be last purchases as a result of events which took place sub-
sequent to 30.6.1974. This question has become material since the
rate of purchase tax was increased from 3% to 5% with effect from
l st July, 1974. Now it is no• disputed in the present case that the.
purchases of goods effected by the assessee prior to 30-6-74 were last
purchases withi~ 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 or commerce which means that they wert-
not sold within the Stat'c and hence the assessee was clearly the last
purchaser within the State and as such was Hable to pay purchase tax
under Item 71 of the First Scheduk to the Kerala General Sales Tax ·
Act. Equally it is clear that th:: 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 Madraj v. Shri T. Nora·
yanaswami Naidu & Anr.(l) when the assessee "files a return and ·
.
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b
'dtohave
declares the stock m hand, the stock m hand cannot c sm
·t
.
.11 d ·0 o the nex
been acquned by last purchase because he may st1
un o
ds .. ,
asicssment year, sell it or he may consume it himself or the go~hc
·
may be destroyed, etc. He would be entitled to claim bebfore tock
· · ·
of t c s
-assessing authorities that the character of acqutsttloll
_
or
.
.
.
.
t vents 1t o1aY
m hand was undcrmmcd; m the light of subsequen c,
.h e can
may not become the last purchase inside the State.
1 ~ecame
therefore be no doubt that the assessee in the prc~:nt ca;~th June.
liable to pay tax on the purchases made by it pnor to t to 30th
1974, as soon as it bccam" dettrmined though subscqucn h State
·ns•de t c
June: 1974, that these purchases were last purchases 1
and were consequently exigible to tax.
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(l) [1967] 3 S.C.R. 62Excerpt shown. Read the full judgment & AI analysis in Lexace.