Deputy Commissioner of Sales Tax (Law), Board of Revenue (Taxes), Ernakulam v. Sri N. Jayaprakash, Package India, Kollam

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HON'BLE THE CHIEF JUSTICE MR.H.L.DATTU & THE HONOURABLE MR. JUSTICE A.K.BASHEER MONDAY, THE 4TH AUGUST 2008 / 13TH SRAVANA 1930 TRC.No. 185 of 1997 --------------------TA.217/1988 of SALES TAX APPELLATE TRIBUNAL, ADDITIONAL BENCH,THIRUVANANTHAPURAM. .................... REVISION PETITIONER/APPELLANT/REVENUE : ------------------------------------------------------------------ DEPUTY COMMISSIONER OF SALES TAX (LAW), BOARD OF REVENUE (TAXES), ERNAKULAM. BY SPL. GOVERNMENT PLEADER, SRI.VINOD CHANDRAN. ## RESPONDENT/RESPONDENT/ASSESSEE : -------------------------------------------------------- SRI.N. JAYAPRAKASH, PACKAGE INDIA, KOLLAM. BY ADV. DR.K.B.MUHAMED KUTTY (SR.) THIS TAX REVISION CASE HAVING BEEN FINALLY HEARD ON 04/08/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ## **H.L.DATTU, C.J. & A.K.BASHEER, J.** - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - T.R.C. No. 185 OF 1997 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Dated this the 4[th] day of August 2008 ## **O R D E R** ## **H.L.DATTU, C.J.** In this revision petition filed, the Revenue has raised a simple question of law, for our consideration and decision. The question is, whether tin containers sold by the petitioner is exigible to levy of tax under Entry 45 of 1[st] Schedule or under Entry 116 of first Schedule to Kerala General Sales Tax Act? 2. In the hierarchy of authorities under the Act, the Tribunal is the last fact finding authority. The Tribunal while disposing of TA No.217 of 1988, dated 06.06.96, has specifically stated that the tin containers sold by the assessee are manufactured using thin iron sheets. This finding of fact by the Tribunal is not disputed by the revenue. They have not even stated that the finding of fact by the Tribunal is a perverse finding and therefore, a question of law would arise for our consideration and consequent decision. The Apex Court in the case of K.Ravindranathan Nair vs. Commissioner of Income Tax, 247 ITR 178, has stated:- _“It is the Tribunal which is the final fact finding authority. A decision of the Tribunal on the facts can be gone into by the Court only if a_ TRC No. 185/1997 2 _question has been referred to it which says that the finding of the Tribunal on the facts is perverse, in the sense that, it is such as could not reasonably have been arrived at on the material placed before the Tribunal. Unless and until finding of fact reached by the Tribunal is canvassed before the High Court in the manner set out above, the High Court is obliged to proceed upon the findings of fact reached by the Tribunal and to give an answer in law to the question of law that is before it. The only jurisdiction of the High Court in a reference application is to answer the questions of law that are placed before it. It is only when a finding of the Tribunal of fact is challenged as being perverse, in the sense set out above, that a question of law can be said to arise”._ 3. The assessee is a dealer in tin, tin sheets and tin containers. He had filed his annual returns for the assessment year 1984-85. The assessing authority has completed the best judgment assessment for the assessment year in question. In so far as the sale of tin containers are concerned, the assessing authority has stated as under: “ _Similarly it is contented that the containers being Iron and Steel articles they are assessable at the rate of 6% as items falling under Sl.No.45 of the 1[st] schedule. In support of this contention he has quoted the decision of the Deputy Commissioner(Appeals), Quilon No.STA.388/85 dated_ TRC No. 185/1997 3 ## _25.6.86._ _Containers will fall under item No.121 i.e., all metalic products other than those specified elsewhere in this schedule or second schedule and hence taxable at the rate of 8%. As stated above the assessee has sold this item at the rate of 8%. Similar other dealers are also selling empty tines at the rate of 8%. Second appeals are pending before the sales tax Appellate Tribunal, Trivandrum against the decisions of the Deputy Commissioner (Appeals), Quilon in this regard. As this is the position, I cannot accept the contention of the assessee. This will be assessed at the rate of 8% as proposed.”_ 4. The assessee, being aggrieved by the said order passed by the assessing authority, had carried the matter in appeal before the first appellate authority. The said authority has allowed the assessee's appeal and has directed the assessing authority to levy tax at the rate of 6% only, treating the item as a commodity falling under Entry 45 of First Schedule to Kerala General Sales Tax Act. The orders passed by the first Appellate Authority is as under : “ _The other contentions pertains to the levy of tax at 8% on the sales of tin containers. The appellant argues that the tin containers fall under entry 45 of the first schedule to the K.G.S.T. Act, 1963 exigible to tax only at 6% as against the rate of 8% adopted by the assessing authority. As per this entry the iron and steel articles not mentioned_ TRC No. 185/1997 4 _elsewhere in the first schedule to the K.G.S.T. Act, 1963 eligible to tax only at 6% as against the rate of 8% adopted by the assessing authority. As per this entry the iron and steel articles not mentioned elsewhere in the first schedule or second schedule to the said Act is assessable to tax at the rate of 6% at the point of first sale in the state by a dealer who is liable to tax under Section 5. I have examined this issue and found that the like of argument of the appellant goes in the right direction and the correct rate of tax applicable to tin containers in the instant case is 6% since the items of goods fall under entry 45 of the First Schedule to the K.G.S.T. Act, 1963._ _Now the appellant has obtained and produced declaration in Form No.18 in support of the claim of concessional rate of tax under Sec.5(7) of the K.G.S.T. Act, 1963. The declaration have since been obtained for a turnover of Rs.3,84,904.17. The appellant is at liberty to produce these statutory declaration forms before the assessing authority, who will consider them and grant eligible tax relief to the appellant_ .” 5. The revenue had carried the matter by way of second appeal before the Tribunal in TA No.217/88. The Tribunal by its order dated 06.06.96, has rejected the appeal and confirmed the order passed by the first Appellate Authority. In the said order the Tribunal has stated as under: “ _Tin containers are manufactured using thin iron_ TRC No. 185/1997 5 ## _sheets_ .”(Emphasis supplied). ## 6. The revenue, being aggrieved by the orders passed by the Tribunal, is before us in this Tax Revision Case. The revenue has framed the following questions of law for our consideration and decision. They are as under: _“a) Is the Tribunal correct in law in its conclusion that turnover in respect of tin containers would fall under entry 45 of the then First Schedule of the K.G.S.T. Act?_ _b) Is not 'this containers', on a proper interpretation fall under entry 116 of the then first Schedule to the K.G.S.T. Act?”_ 7. For resolving the dispute raised by the revenue, the relevant entries requires to be noted. They are as under: |-----------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------| |---|---|---|---| |Sl.|||Rate of| |No.|Description of goods|Point of levy<br>|tax| |-----------------------------------------------------------------------------------------|||| |(1)|(2)|(3)<br>|(4)| |-----------------------------------------------------------------------------------------|||| |xx|xx|xx|xx| |45|Iron and steel articles, not|At the point of first|| ||mentioned elsewhere in this|sale in the State by a|| ||Schedule or the Second|dealer who is liable|| ||Schedule|to tax under Section 5|6| |xx|xx|xx|xx| |116|Tin including tin sheets||| ||and tin plates<br>|do|8| |---------------------------------------------------------------------------------------|||| TRC No. 185/1997 6 8. In the normal course, we would not have accepted the stand of the assessee, that, the tin containers sold by them would fall under Entry 45 of first Schedule to the K.G.S.T. Act, because the said entry speaks of iron and steel articles not mentioned elsewhere in this Schedule or Second Schedule. The Entry 116 of the first Schedule to the K.G.S.T. Act speaks of tin including tin sheets and tin plates. It baffles the perception of any reasonable person that tin container could be an article manufactured out of iron sheets. The articles sold by the assessee would either come under Entry 116 or Entry 126 of first Schedule to the K.G.S.T. Act, which again speaks of metallic products other than those specifically mentioned elsewhere in this schedule or second Schedule. 9. However, the Tribunal, which is the last fact finding authority, in its order specifically observes, that the item sold by the assessee namely, tin containers, are manufactured using thin iron sheets. That finding of fact is not questioned by the revenue on the ground that the said finding is a perverse finding. Since the last fact finding authority has come to the conclusion that what is sold by assessee is an article made out of iron sheets, in our opinion, necessarily has to fall under Entry 45 of first Schedule to the K.G.S.T. Act. 10. In that view of the matter, we do not find any good reason to interfere with the orders passed by the Tribunal. Accordingly, the revision requires to be rejected and it is rejected. The decision rendered by us is purely based on the facts TRC No. 185/1997 7 as noticed by the Tribunal. This order shall not be treated as a precedent in any other case, since we have decided this case in the peculiar facts and circumstances of the case, which facts is not disputed by the Revenue. Ordered accordingly. ## **(H.L.DATTU) CHIEF JUSTICE** **(A.K.BASHEER) JUDGE** ttb/dk.