IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE K.SURENDRA MOHAN THURSDAY, THE 2ND APRIL 2009 / 12TH CHAITHRA 1931 ST.Rev..No. 46 of 2009 -------------------------------- TA.NO.4/2008 OF KERALA SALES TAX APPELLATE TRIBUNAL, THIRUVANANTHAPURAM. .................... REVISION PETITIONER/ APPELLANT/ ASSESSEE: ----------------------------------------------------------------------- ABDUL MAJEED, FRIENDS ASSOCIATES KANDACHIRA, PERINAD PO, KOLLAM DISTRICT. BY DR.K.B.MUHAMED KUTTY, SENIOR ADVOCATE, ADV. MR.K.M.FIROZ. RESPONDENT/ RESPONDENT/ REVENUE: ------------------------------------------------------------ THE STATE OF KERALA, REPRESENTED BY THE SECRETARY TO GOVERNMENT, TAXES DEPARTMENT, SECRETARIAT,THIRUVANANTHAPURAM. BY GOVT. PLEADER MR. V.K. SHAMSUDEEN. THIS SALES TAX REVISION HAVING COME UP FOR ADMISSION ON 02/04/2009, ALONG WITH W.P.(C). NO. 6791/2009,THE COURT ON THE SAME DAY PASSED THE FOLLOWING: prv. C.N.RAMACHANDRAN NAIR & K.SURENDRA MOHAN, JJ. ------------------------------------------------------------------------------------ S.T.Revn NO: 46/2009 & WP(C) 6791/2009 ----------------------------------------------------------------------------------- Dated this the 2nd April, 2009. JUDGMENT RAMACHANDRAN NAIR, J. Connected tax revision case and the writ petition pertain to levy of tax as well as penalty on the purchase and sale of scrap bronze by the petitioner from the Sabarimala Devastanam. Even though purchase turnover was above Rs.24 lakhs, Devaswom not being a dealer did not collect tax and was not assessed on the sales turnover. Tax and penalty are initially levied on the petitioner on the assumption that petitioner recycled the scrap into products and sold the same. However, pursuant to remand by the Tribunal the Assessing Officer conducted enquiry and found vide Annexure D order produced in S.T.Revn. 46/2009 that petitioner was not engaged in recycling of the purchased articles. Therefore, liability to be considered is only under Section 5(1) of the KGST Act on the purchase and sale of the goods as such by the petitioner. Even though senior counsel appearing for the petitioner contended that petitioner's sales being second sales cannot be assessed, we do not think the concept of second sale applies here because petitioner is S.T.Revn.46/09 & WP(C) 6791/09 2 the first seller who is liable to pay tax as dealer under the Act. Therefore, sales tax is attracted at the point of first sale by the petitioner after purchase from the Devaswom. So much so levy of tax is only to be upheld. However, we notice that in view of the bonafide dispute and in view of the payment of Rs.2,38,096/- towards tax payable by the petitioner at full rate and since petitioner is not a regular dealer engaged in trading, we cancel the penalty but on a further condition that within one month from today petitioner will settle the balance tax liability due under the revised assessment order that is by paying Rs.61,152/- towards tax and Rs.11,619/- towards interest without any further liability for interest under any provision of the Act. However, if there is any other demand pending against petitioner except with regard to this transaction then department can proceed for recovery. Since we cancel the penalty on condition of paying the tax and interest as above within one month from today, Govt. Pleader will move this S.T.Revn.46/09 & WP(C) 6791/09 3 Court if payment is not made as above for reconsidering the question of penalty. Sales tax revision is dismissed confirming tax demanded with interest as above and writ petition is allowed cancelling penalty on the condition stated above. C.N. RAMACHANDRAN NAIR Judge K. SURENDRA MOHAN Judge jj K.K.DENESAN & V. RAMKUMAR, JJ. ---------------------------------------------------- M.F.A.NO: ----------------------------------------------------- JUDGMENT Dated: