IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE P.R.RAMACHANDRA MENON FRIDAY, THE 29TH OCTOBER 2010 / 7TH KARTHIKA 1932 WP(C).No. 27373 of 2005(H) ---------------------------------- PETITIONER(S): ------------------- ANIL KUMAR GADODIA, PROPRIETOR, JIWAN INTERNATIONAL, 882 A, KEDAR BUILDING, GHANTA GHAR, OLD SUBZI MANDI, DELHI-110007. BY ADVS. SRI.K.I.MAYANKUTTY MATHER SRI.SUNIL SHANKER RESPONDENT(S): -------------------- 1. STATE OF KERALA, REPRESENTED BY ITS SECRETARY (TAXES), SECRETARIAT, THIRUVANANTHAPURAM. 2. COMMISSIONER, COMMERCIAL TAXES, THIRUVANANTHAPURAM. 3. DIVISIONAL FOREST OFFICER, MUNNAR. 4. FOREST RANGE OFFICER, MARAYOOR. R1 TO R4 BY GOVT.PLEADER SRI.C.K.PRADEEP THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 29/10/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: svs/ WP(C).No. 27373/2005(H) APPENDIX PETITIONER'S EXHIBITS: P1: COPY OF THE COMMUNICATION SENT BE THE 4TH RESPONDENT TO THE PETITIONER. P1(a):COPY OF THE CHALLAN SENT BY THE 4TH RESPONDENT TO THE PETITIONER. P2: COPY OF THE INTERIM ORDER PASSED BY THE HON'BLE SUPREME COURT. P3: COPY OF THE INTERIM ORDER PASSED BY HON'BLE MADRAS HIGH COURT WP 28483 OF 2005. RESPONDENT'S EXHIBITS NIL /TRUE COPY/ P.A. TO JUDGE svs/ P.R. RAMACHANDRA MENON, J. .............................................................................. W.P.(C) No. 27373 OF 2005 ......................................................................... Dated this the 29th October , 2010 J U D G M E N T The issue involved in this Writ Petition is whether the sale of sandalwood effected by the Forest Department, (purchased by the petitioner in public auction, allegedly to be taken outside the State, by virtue of operation of the petitioner exclusively outside the State of Kerala), is liable to be treated as an Inter-State sale, attracting lesser tax at the rate of 4% under the CST Act or as a 'Local Sale' with a higher rate of 12.5% under the State Act. 2. The petitioner is a manufacturer of sandalwood oil and allied products and an assessee on the rolls of the Sales Tax Officer, Ward No.4, New Delhi, having business place in New Delhi, admittedly having no registration under the Sales Tax laws of the State of Kerala. In response to the notification issued by the Forest Department as to the sale of sandalwood, the petitioner also participated in the auction and turned to be the successful bidder. The petitioner satisfied a portion of the amount W.P.(C) No. 27373 OF 2005 2 as stipulated, on confirmation of auction held on 08.06.2005. Exts.P1 and P1(a) were issued demanding the balance amount including the tax at the rate of 12.5%, which was sought to be resisted by the petitioner by filing the above Writ Petition. It is contended that the petitioner, being a dealer having the place of business in New Delhi and not a registered dealer in Kerala and further since the materials purchased in the auction are not intended to be sold in Kerala, but to be taken outside the State, the transaction has to be reckoned as an 'Inter-State sale' attracting the tax liability only at the concessional rate of 4%. This being the position, the demand to satisfy the tax @ 12.5% as shown in Exts.P1/P1(a) is stated as without any rhyme or reason and hence is subjected to challenge in this writ Petition. 3. When the matter came up for consideration before this Court on 26.09.2005, it was admitted also granting an interim order permitting the materials to be 'taken out' on condition that the petitioner furnished Bank Guarantee for the disputed extent of liability, which was ordered to be kept alive during the pendency of the Writ Petition. The learned Counsel for the W.P.(C) No. 27373 OF 2005 3 petitioner submits that the condition was satisfied and the material was taken to the destination outside the State . It is also submitted that the issue is actually covered in favour of the petitioner, as per the decision rendered by the Apex Court in Co-operative Sugars (Chittur) Ltd. vs. State of Tamil Nadu [(1993) 90 STC 1 (SC)]. 4. The learned Sr. Government Pleader appearing for the respondents submits that the idea and understanding of the petitioner is quite wrong and misconceived. It is pointed out that the sale effected by the Forest Department, who actually is having the role of a 'dealer', comes within the purview of SRO. 82/06, under which circumstance, the particular commodity (sandalwood) squarely comes under Entry 91 which attracts the tax liability at the rate of 12.5%. Even before issuance of the said SRO, the learned Government Pleader submits, that it falls under residual entry of Section 6(1)(d) attracting the tax liability at the rate of 12.5% as 'sandalwood' is not an item which stands included under clause (a) or © of section 6(1). Further, if version of the petitioner that the transaction has to be reckoned W.P.(C) No. 27373 OF 2005 4 as 'Inter-State sale' under the CST with lesser rate of tax at 4% is to be accepted, the petitioner has to satisfy various requirements as contemplated under the relevant provisions of law and the binding judicial precedents on the point; contends the learned Government Pleader. 5. During the course of hearing, it is brought to the notice of this Court, that exactly a similar issue happened to be considered by a Division Bench of this Court earlier in Ashish Kapur vs. Forest Officer, Marayur and others (2005) 141 STC 333) involving the very same commodity (Sandalwood) and the sale conducted by the same Department (Forest Department). The decision cited from the part of the petitioner, i.e, 90 STC 1 (cited supra) was also considered by the Division Bench in the said case, along with the other relevant judicial precedents. After meticulous analysis of the facts, figures and relevant provisions of law, and the verdicts as above, it was held that the auction/sale conducted by the Forest Department as in the instant case, was not liable to be declared as an Inter-State sale. W.P.(C) No. 27373 OF 2005 5 6. The learned Counsel for the petitioner submits that the said decision has already been taken up before the Apex Court by filing SLP, while it is stated by the opposite side that the matter has become final, by virtue of declining interference by the Apex Court. In any view of the matter, the fact remains that, as on date, the issue is squarely covered by the decision of the Division Bench of this Court in (2005) 141 STC 333) (cited supra). 7. In the said circumstance, this Court finds that the pleadings and prayers raised by the petitioner do not hold any water at all. There is no legally sustainable ground in support of the prayers sought for. Accordingly interference is declined. The Writ Petition is dismissed. P.R. RAMACHANDRA MENON, JUDGE. lk