SIKRI - (1.) THE following Judgment of the court was delivered by :
(2.) THIS appeal by special leave is derected against the judgement of the High court of Kerala the judgement of the High court of Kerala in Tax Revision Case No. 44 of 1960. The respondent, N. Sami Iyer, hereinafter referred to as the assessee, is a dealer in tobacco. He objected to the assesseement of the turnover of Rs. 7,767.84 for the assessment year 1957-86, inter alla, on the ground that the goods were the subject-matter of purchases which had already been assesssed at the point of purchase in the hands of the assessee. He failed before the Sales Tax Authorities, but in a revision the High court accepted his contention and held that this turnover was not liable to tax. In order to appreciate the contention of the appellant it is necessary to mention a few facts. During the period April 1, 195 7/09/1907, the assessee was residing in Malabar and in this area the Madras General Sales Tax Act (9 of 1939) applied. Section 8(5) of this Act provides: "The taxes under Ss. (1), (1-A) and 12) shall be assessed, levied ana collected in such manner and in such instalments, if any, as may be prescribed: Provided that- (i) In respect of the same transaction of sale, the buyer or tlie seller, but not both, as determined by such rules as may be prescribed, shall be taxed; (ii) Where a dealer has been taxed In respect of the purchase of any goods in accordance with the rules referred to in Cl. (1) of this proviso, he shall not be taxed again in respect of any sale of such goods effected by him." It is common ground that tobacco was taxable at the purchase point under the Madras Act and that the turnover with which we are concerned had suffered taxation at that point under the Madras Act. The Travancore-Cochin General Sales Tax (Amendment) Act, 1957 (12 of 1957) came into force on 1/10/1957. This Act changed the short title of-the Travancore-Cochin Genera] Sales Tax Act, 1128 (11 of 1125) to the General Sales Tax Act, 1125, and extended it to the whole of the State of Kerala, including Malabar District. Section 14 of Act 12 of 1957 inserted S. 26-A in Act 11 of 1125 which reads as follows." "26-A. Transitory provisions.- (1) In the application of this Act to the Malabar District referred to in Ss. (2) of S. 3 of the States Reorganisation Act, 1956, during the financial year ending with 31/03/1958, the provisions of this Act shall be sub)'ect to the provisions contained in Schedule II. (2) The government may from time to time by notification in the Gazette add to, alter or cancel Schedule II." Schedule II is in the following terms: "1. Every registration effected and every licence issued under the Madras General Sales Tax Act, 1939 or the rules made there1417 under in their application to the Malabr District referred to in Ss. (2) of S.5 of the States Reorganisation Act, 1058 (hereinafter referred to as the Malabar area), and in force at the commencement of the Travancore-Cochin General Sales Tax (Amendment) Act, 1957, shall be deemed to nave beep effected or issued under this Act or the rules made thereunder. 2. In calculating the total turnover tor the financial year ending with 31/03/1988 of a dealer in the Malabar area for purposes of Ss. (3) of S.3 of this Act, the turnover of the dealer under the Madras General Sales Tax Act, 1939 up to the commencement of the Travancore-Cochin General Sales Tax (Amendment) Act, 1957, shall also be taken into account. . ." The effect of S. 26-A and the Schedule, among other things, is that the dealer's registration and the licences are deemed to nave been effected under this Act, and secondly, that the total turnover for the period 1/04/195 7/09/1957, if to be taken into amount under the General Sales Tax Act.
(3.) ACT 12 of 1957, by S. 15 inter alia repealed the Madras General Sales Tax ACT, 1939, as In force in the Malabar District, referred to in Ss. (2) of S. 3 of the States Reorganisation ACT, 1956. Section 3(5) of the General Sales Tax ACT, 1125, is in the same terms as S. 3(5) of the Madras General Sales Tax ACT, reproduced above. Section g (vil) of the General Sales Tax ACT (corresponding to S. 5 of the Madras General Sales lax ACT) provides as follows: "The sale of goods specified in Col. (2) of Schedule I shall be liable to tax under S. 3, Ss. (1) only at such. single point in the series of sales by successive dealers as may be specified by the government by notification in the Gazette; and where the taxable point so specified is a point of sale, the seller shall be liable for the tax on the turnover for which the goods are sold by him at such point, and where the taxable point so specified is a point of purchase, the Duyer shall be liable for the tax on the turnover for which the goods are bought by him at such point." The description of item 2 in column (2) of Schedule I at the relevant time was "Tobacco other than Beedi Tobacco (Suka)." In exercise of the powers conferred by S. 5(vii) the government issued a notification No. HI-10674/57/RD-2 dated 28/09/1957. The relevant portion of the notification reads as follows: "In exercise of the powers conferred by Cl. (vil) of S. 5 of the General Sales Tax Act (Act XI of IlitB) the government of Kerala hereby specify the point mentioned In column 3 of the schedule; hereto appended as the point liable to tax under S. 8(1) on the goods mentioned in column 2. SCHEDULE JUDGEMENT_1415_AIR(SC)_1966Html1.htm The result of the above notification Is that whereas previously the taxable point In respect of tobacco was the point of first purchase under the Madras Act, now the taxable point is the first sale in the State. ;