IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE THE CHIEF JUSTICE MR.H.L.DATTU & THE HONOURABLE MR. JUSTICE A.K.BASHEER WEDNESDAY, THE 3RD SEPTEMBER 2008 / 12TH BHADRA 1930 ST.Rev..No. 332 of 2006 ------------------------------------------ (ORDER DATED 5.12.2003 IN TA.No.630/2002 OF THE KERALA SALES TAX APPELLATE TRIBUNAL, THIRUVANANTHAPURAM ASSESSMENT YEAR 1994-1995) .................... REVISION PETITIONER/APPELLANT: --------------------------------------------------- M/S.PACE INTERNATIONAL LTD., KOLLAM, REPRESENTED BY ITS DIRECTOR, K.VELAPPAN PILLAI. BY ADV. SRI.ARIKKAT VIJAYAN MENON SRI.HARISANKAR V. MENON SMT.MEERA V.MENON RESPONDENT/RESPONDENT: ------------------------------------------ STATE OF KERALA. BY SENIOR GOVERNMENT PLEADER SRI.MUHAMMED RAFIQ. THIS SALES TAX REVISION HAVING COME UP FOR ADMISSION ON 03/09/2008, THE COURT ON THE SAME DAY PASSED THE FOLLOWING: H.L.DATTU, C.J. & A.K.BASHEER, J. ------------------------------------------------------ S.T.Rev.No.332 of 2006 --------------------------------------------- Dated, this the 3rd day of September, 2008 O R D E R H.L.Dattu, C.J. The assessee being aggrieved by the orders passed by the Kerala Sales Tax Appellate Tribunal, Thiruvananthapuram in T.A.No.630/2002 dated 5.12.2003 is before us in this tax revision petition. 2. The assessee has framed the following questions of law for our consideration and decision. They are as under: “A. Whether on the facts and in the circumstances of the case, has not the Appellate Tribunal gone wrong in confirming the levy of tax on the sales of REP licence, since they cannot be equated with goods? B. Whether on the facts and in the circumstances of the case, is not the levy of tax on the sales turnover of REP licence, illegal as sales of REP licence has taken place from the State of Tamilnadu? C. Whether on the facts and in the circumstances of the case has not the appellate tribunal gone wrong in observing that no evidence was produced to prove that the sales were effected from Tamilnadu, when admittedly the revision petition had no processing in the State of Kerala? 3. The issue raised in the revision petition is no more res S.T.Rev.No. 332 of 2006 -2- integra, in view of the law declared by the Apex Court in the case of M/s.Yasha Overseas & Others Vs. Commissioner of Sales Tax & Others (Civil Appeal No.2155 of 2000 and connected matters disposed of on 6-5-2008). In the said decision, at paragraphs 40, 41, 42 and 43 the Apex Court has stated as under: 40. We are afraid, we find the submission unacceptable. We are unable to see DEPB either as a deb or as a beneficial interest in movable property not in possession of the claimant. To us it is plain that DEPB like REP licence has its own intrinsic value and the purchaser, on payment of consideration, buy something for its value. The DEPB credit is thus clearly 'goods' within the meaning of sales tax laws and its sale clearly exigible to tax. 41. We may observe here, if DEPB (or for that matter REP license!) has to be compared with a lottery ticket, it can only be compared with a lottery ticket that has won the prize. The prize-winning lottery ticket ceases to be a mere piece of paper having no value itself. It acquires inherent value and becomes itself a thing of value. Imagine a situation where prize winning lottery tickets are freely available for sale (As a matter of fact, clandestine sale of the prize winning lottery ticket for conversion of black money into white is not completely unknown!). In buying the prize winning lottery ticket the purchaser would pay consideration for the value that the piece of paper has acquired and in that situation we fail to see how that ticket can be described as anything else but 'goods'. 42. If any more analogies are to be given one might compare DEPB with prepaid meal tickets or prepaid petrol coupons or accumulated flying miles. A meal ticket, a petrol coupon or flying miles credit has its own intrinsic value. If permitted free transferability those would soon S.T.Rev.No. 332 of 2006 -3- become market commodities and would be sold and bought for their value as 'goods'. 43. In light of the discussions made above, the two questions framed at the beginning of the judgment are to be answered as follows: The Constitution Bench decision in Sunrise does not alter the position in regard to levy of tax on sale of REP licence and on that issue the three-Judge Bench decision in Vikas continues to hold the field. DEPB has an intrinsic value that makes it a market commodity. Therefore, DEPB, like REP licence qualifies as 'goods' within the meaning of the Sales Tax laws of Delhi, Kerala and Mumbai and its sale is exigible to tax. 4. In view of the law declared by the Apex Court, in our opinion, the questions of law framed by the assessee requires to be answered against the assessee and in favour of the Revenue. Accordingly, the sales tax revision petition is rejected. Ordered accordingly. (H.L.DATTU) CHIEF JUSTICE (A.K.BASHEER) JUDGE MS