RELIANCE TRADING COMPANY Vs. STATE OF KERALA
LAWS(SC)-2006-3-68
SUPREME COURT OF INDIA
Decided on March 30,2006

RELIANCE TRADING COMPANY Appellant
VERSUS
STATE OF KERALA Respondents


Referred Judgements :-

GODFREY PHILLIPS INDIA LTD VS. STATE OF U P [REFERRED TO]



Cited Judgements :-

TRIMURTHI FRAGRANCES (P) LTD VS. GOVERNMENT OF N.C.T. OF DELHI [LAWS(SC)-2022-9-91] [REFERRED TO]
SANTHOSH MAIZE AND INDUSTRIES LIMITED VS. STATE OF TAMIL NADU [LAWS(SC)-2023-7-13] [REFERRED TO]
SHANTI FRAGRANCES VS. UNION OF INDIA AND ORS [LAWS(SC)-2017-9-111] [REFERRED TO]
TRIMURTHI FRAGRANCES (P) LTD VS. GOVT.OF N.C.T OF DELHI [LAWS(SC)-2023-5-27] [REFERRED TO]


JUDGEMENT

- (1.)THE issue involved in these appeals is identical and hence they can be decided by a common judgment. We shall take the facts in Civil Appeal No. 6621 of 2000 for deciding the issue.
(2.)THE period involved is 1986-87 to 1993-94: the question is whether cotton based tarpaulin is exigible to sales tax under the Kerala General Sales Tax Act, 1963 ("KGST Act")
S.5 of the KGST Act is the charging section which provides for the incidence and levy of sales tax. Under S.5(1)(i) in the case of goods specified in the First or Second Schedule of the KGST Act, tax is leviable at the rates and only at the points specified against such goods in the said Schedules. In the case of goods not specified in the First or Second or Fourth or Fifth Schedule, tax at a specified rate is leviable at all points of sales. S.9 of the KGST Act provides that a dealer who deals in the goods specified in the Third Schedule shall not be liable to pay any tax under the KGST Act in respect of the sale or purchase of such goods. S.10 is an enabling power of the State Government to grant exemption from tax, with which we are not concerned presently.

Prior to 31.3.1984, there was no specific entry for 'tarpaulin' in Schedules I and II. 'Tarpaulin' was classified as a separate item under Entry 100-C of Schedule I and made taxable at a specified rate at the point of first sale in the State with effect from 1.4.1984. This position continued till 30.6.1987 when the relevant entry, reading identically, was renumbered as 152, reading as: "PVC cloth, water proof cloth, rexine and their products and tarpaulin".

(3.)THE rate of tax at the material time was 8% at the point of first sale. This situation continued till 31.7.1991. By the Kerala Finance Act, 1991, the commodity "PVC cloth" was deleted from the Third Schedule with effect from 1.8.1991 from the relevant entry. This situation continued till 31.3.1992. Under the Kerala Finance Act, 1992 a new Entry 106 read as "Rain coat, tarpaulin and products of water proof cloth, rexine and PVC cloth" was added. THE rate of tax was also increased to 10% without any change in the point of levy.
According to the Revenue, 'tarpaulin' falls under Entry 100-C or 152, as the case may be, and is taxable at 8% at the first point of sale from 1.4.1984 to 31.3.1992 and from 1.4.1992 it falls under Entry 106 taxable at 10% at the point of first sale in the State.



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