HALEEMA ZUBAIR, TROPICAL TRADERS versus STATE OF KERALA

Citation: [2008] 16 S.C.R. 352 · Decided: 19-11-2008 · Supreme Court of India · Bench: S.B. SINHA · Disposal: Appeal(s) allowed

Judgment (excerpt)

[2008] 15 S.C.R. 352 
A 
HALEEMA ZUBAIR, TROPICAL TRADERS 
~-
v. 
ST ATE OF KERALA 
(Civil Appeal No. 6707 of 2008) 
B 
NOVEMBER ·19, 2008 
[S.B. SINHA AND. CYRIAC JOSEPH, JJ.) 
y 
. 
it 
Kerela General Sales Tax Act, 1963 - ss. 2(viii) and 12 
c - Levy of sales tax - Burden of proof - Assessee proprietor 
. of two concf!]rn - One concern dealer of certain goods and 
other rendering professional services - Assessment order -
Professional income by second concern added to the sales 
turnover from the bus.iness of first concern, for levy of sales 
D 
tax - Upheld by tribunal and High Court - Sustainability of 
- Held: Not sustainable - Sa/es tax is leviable on sale of 
goods -
Profe~sional service rendered does not constitute 
sale of goods -
Assessee produced income tax returns 
1 
showing payment of income tax on professional income as 
also other documents and Assessing officer and High Court 
E 
noticed the same - Case of assessee that it discharged the 
'~ 
burden of proof by producing documents - High Court erred 
in considering the same -
Hence, matter remitted to the 
Assessing Authority. 
F 
Appellant-assessee was proprietress of two 
concerns. The concern TP Traders is a dealer in ceramic 
i 
tiles and concern Mis. PF Company renders professional 
services to various exporters of inspection and 
certification of quality of items sought to be exported. TP 
G Traders disclosed the total turnover of business for 
payment of sales tax. The Assessing Authority included 
the receipt of commission by Mis. PF Company in the 
taxable turnover for purpose of payment of sales tax and 
I· 
passed assessment order. The receipt of commission 
H 
352 
"
HALEEMA ZUBAIR, TROPICAL TRADERS v. STATE OF 353 
KERALA 
--·I 
was not supported and proved by documentary A 
evidence. Appellant challenged the order on the ground 
tHat the services so rendered ·was not a 'sale'. It produced 
certain documents. First Appellate Authority ·held that the 
receipt of commission was not liable 'to tax and excluded 
the· sa'me. In appeal, the tribunal held that. the assessee B 
was 'unable to discharge.the burden of proof in terms of 
s. 12 C>fthe Kerela General Sales Tax Act, 1963, thus the 
First Appellate Authority was r1ot justified in deleting the 
receipt of commission from the turnover.· Appellant filed 
revision petition which was dismissed. Review c 
application was also dismissed. Hence the present 
appeal. 
Allowing the appeal, the Court 
HELD: 1.1. The Kerela General Sales Tax Act, 1963 o 
is a taxing statute. The jurisdicUon of an assessing 
authority, therefore, is confined to assess tax on taxable 
turnover. Its primary duty is to ascertain as to whether the 
figures furnished by the assessee are correct or not. 
[Para 12) [359-D] 
E 
1.2. Assessment of sales tax must be on sale of 
goods. There is no bar in law for the same assessee to 
carry out different businesses. The business carried out 
by her of ceramic tiles involving transactions o·f sales 'and 
purchase has no connection with the professionai F 
services rendered by her to the exporters. [Para 13] [359-
E] 
. 
1.3. The sine qua non or the condition precedent for 
passing of an order of assessment is transaction of sale. G 
Professional service rendered does not constitute sale. 
Such a professional service rendered by a person 
attracts service tax, which is a different nature of tax. 
[Para 14) [359-F] 
Bharat Sanchar Nigam Ltd. and Anr. v. Union of India 
H 
354 
SUPREME COURT REPORTS 
[2008] 16 S.C.R. 
A 
and Ors. 2006 (3) SCC 1, referred to. 
+---
1.4. Section 12 of the Act places t~e burden on the 
assessee. The said provision would-be attracted subject 
to the condition that first; a transaction of sale has·_ taken 
B 
place; secondly that one ot the parties thereto is a dealer. 
A provision relating to. "reverse burden",· must be 
construed having·regard to the nature. of the statute; as 
., 
the general law is that the burden of proof would be on 
the State. [Paras 16 and 17] [360-F; 361-B] · 
c 
Cooperative Company Ltd. v. Commissioner of Trade 
Tax, U.P. 2007 (4) SCC 480, referred to. 
1.5. The business activities relating to transaction of 
Mis. PF Company unless otherwise proved cannot bring 
D the appellant within the purview of definition of 'dealer'. 
If she was not a dealer, the professional fees earned by 
her would not be exigible to payment of sales tax; only 
because the appellant happens to be the proprietress of 
-\ 
Mis. TP Traders also. [Paras 

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