IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE V.K.MOHANAN THURSDAY, THE 28TH AUGUST, 2008 / 6TH BHADRA, 1930 ST.Rev..No. 522 of 2004 (TA.369/2000 of AGRL.I.T. ADDL.BENCH, PALAKKAD) .................... REVISION PETITIONER: ------------------------------ M/S.M.SUBRAMANIYAN & BROTHERS, TIMER MERCHANTS 142, MEENKARA ROAD, POLLACHI, REP. BY M.MARIMUTHU. BY ADV. SRI.ARIKKAT VIJAYAN MENON SRI.HARISANKAR V. MENON RESPONDENT: ------------------ STATE OF KERALA. BY GOVERNMENT PLEADER SRI.TEK CHAND. THIS SALES TAX REVISION HAVING BEEN FINALLY HEARD ON 28/08/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C.N.RAMACHANDRAN NAIR & V.K.MOHANAN, JJ. --------------------------------------------- S.T.Rev.No. 522 of 2004 --------------------------------------------- Dated this the 28th day of August, 2008 J U D G M E N T Ramachandran Nair,J: This revision is filed against the order of the Tribunal confirming the assessment of tax on the petitioner on the purchase value of timber under the third proviso to Section 5(1)(v) of the K.G.S.T.Act. 2. We have heard counsel for the petitioner as well as the Government Pleader for respondents. 3. The petitioner, a timber merchant from Tamil Nadu came to Kerala, took registration under the K.G.S.T.Act and purchased timber from forest depots in Kerala. The total purchases for the year account for Rs.1.78 crores and according to the petitioner, forest depot charges different rate of tax under the Vth Schedule on the purchase of timber. The contention of counsel for the petitioner is that there is no provision under the Vth Schedule to collect tax on timber in excess of the maximum rate provided under the schedule which was 12% for part of the year and 12.5% for the balance period. The Vth Schedule provides for levy of tax at full rate when sale is by a registered dealer to an unregistered dealer. S.T.Rev.NO. 522 of 2004 :-2-: However, it is specifically stated that when sale is made to a registered dealer, rate of tax is only 10%. Such dealer has to pay the balance rate of tax i.e., 2% or 2½% as the case may be. The proviso to above referred Section 5(1)(v) provides a situation where a registered dealer purchases goods, dispatches the goods out side the State other than by a sale wherein he is made to pay tax at purchase point at 2% or 2½%. The contention of counsel for the petitioner is that the proviso has no application to the case where the dealer, purchasing the goods and dispatching it outside the State has paid full rate of tax. However, the Tribunal held that proviso is attracted in all cases where purchaser from the first seller is the registered dealer in Kerala under the K.G.S.T.Act and if he dispatches the goods to outside the State other than by way of sale. We are in agreement with the finding of the Tribunal because the petitioner, being a registered dealer, was liable to pay tax at the rate of only 10% on his purchases from the Forest Department. We do not know, under what circumstances varying rates are charged by the Forest Department. At least for an amount of Rs.10 lakhs and odd, the tax collected by the Forest Department is only 10% and the petitioner is liable to pay tax at 2½%. Admittedly, petitioner is S.T.Rev.NO. 522 of 2004 :-3-: liable to pay tax on this turnover when such goods are consigned outside the State other than by way of sale. On part of turnover instead of collecting 12.5%, the Forest Department has collected 12% from the petitioner. The scheme of the Act is that if a registered dealer collects excess tax, the buyer has a remedy by way of request for forfeiture under Section 46A(1) of the K.G.S.T. Act and to claim refund under Rule 31D of the K.G.S.T.Rules. Subject to this right available to the petitioner, the petitioner is obviously liable under the proviso because admittedly, petitioner was the registered dealer in Kerala and after purchase of goods, the timber was sent outside Kerala other than by way of sale in the State. We therefore see no ground to interfere with the order of the Tribunal. The revision is dismissed. It is open to the petitioner to take steps before the Assessing Officer before whom the Forest Department remitted tax to request for forfeiture and refund. C.N.RAMACHANDRAN NAIR, Judge MBS/ V.K.MOHANAN, Judge S.T.Rev.NO. 522 of 2004 :-4-: C.N.RAMACHANDRAN NAIR & V.K.MOHANAN, JJ. -------------------------------------------- I.T.A.NO. 81 OF 2000 ------------------------------------ S.T.Rev.NO. 522 of 2004 :-5-: J U D G M E N T DATED:17-6-2008 S.T.Rev.NO. 522 of 2004 :-6-: