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 THURSDAY, THE 17TH JULY 2008 / 26TH ASHADHA 1930 ST.Rev..No. 168 of 2008 ----------------------------------------- ( ORDER DATED 10-10-2006 IN TA.205/2005 OF KERALA SALES TAX APPELLATE TRIBUNAL, ADDITIONAL BENCH,KOTTAYAM) .................... REVISION PETITIONER/APPELANT: ------------------------------------------------- M/S.G.R.K. AND COMPANY ERAMALLOOR, ALAPPUZHA DISTRICT. BY ADV. SRI.V.P.SUKUMAR SRI.JAIRAM.V.MENON RESPONDENT/RESPONDENT: ------------------------------------------ STATE OF KERALA, REPRESENTED BY THE CHIEF SECRETARY, SECRETARIAT, THIRUVANANTHAPURAM. BY SENIOR GOVERNMENT PELADER SRI.MUHAMMED RAFIQ. THIS SALES TAX REVISION HAVING COME UP FOR ADMISSION ON 17/07/2008, THE COURT ON THE SAME DAY PASSED THE FOLLOWING: H.L.DATTU, C.J. & A.K.BASHEER, J. ------------------------------------------------------ S.T.Rev.No.168 of 2008 --------------------------------------------- Dated, this the 17th day of July, 2008 O R D E R H.L.Dattu, C.J. Two issues would arise in this tax revision case filed by the assessee for the assessment year 2001-2002. The first issue is with regard to whether the transfer value of DEPB can be subjected to tax under the provisions of the Kerala General Sales Tax Act? The second issue is whether the assessing authority, the first appellate authority and the Tribunal were justified in restricting the claim of wastage of ginger to 8% when the assessee had claimed it as 11%? 2. In so far as the first issue is concerned, in our opinion, the same is no more res integra, in view of what has been stated 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). In the said decision the apex Court at paragraphs 35, 36 and 38 has observed as under: 35. Paragraph 7.32 dealt with transferability and provided as follows: S.T.Rev.No. 168 of 2008 -2- “The DEPB on post export basis and/or the items imported against it are freely transferable. The transfer of DEPB shall however be for import at the port specified in the DEPB which shall be the port from where exports have been made. However, imports from a different port shall be allowed as per the terms and conditions of notification issued by Department of Revenue” Paragraph 7.40 stated that pre-export DEPB would be non-transferable and also subject to actual user condition but in this case we are not concerned with pre-export DEPB. 36. It is thus to be seen that in two vital aspects, relevant to the issue under consideration, DEPB is exactly the same as REP licence. Like REP licence it has an innate value and for which it freely sells in the market. Much argument was advanced on the point that DEPB, unlike REP licence was not a licence for import of goods but the submission is clearly misconceived and unacceptable. DEPB is not a licence simply because under the liberal import policy no licence is required to import a very large number of goods and very few items, placed under the negative list, require a licence for import. We are, therefore, unable to accept the submission that DEPB is materially different from REP licence and its transfer by way of sale would not be exigible to sales tax. xxx xxx 38. Learned counsel alternatively submitted that even if the credit is seen not as a debt but as movable property, the sale of DEPB only involved the transfer of the right to S.T.Rev.No. 168 of 2008 -3- claim credit. The credit not being in possession of the claimant, the right to utilize it against duty payable on a future import was certainly a beneficial interest in that movable property. Seen thus the credit would still fall within the second part of the definition of actionable claim.” The apex Court has further stated that 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. (underlining is by us). Therefore, the first issue is answered against the assessee and in favour of the Revenue. 3. In so far as the second issue is concerned, the assessing authority in its order has stated as under. “The wastage claimed towards dried ginger is 11%. This is very high. The wastage claimed towards the ginger on account of grinding is only 6%. The wastage claimed for dried ginger is abnormal considering the fact that there was no garbling process. Hence the wastage will be limited to 8%.......” 4. The first appellate authority has also considered this issue and while answering the same has stated as under: “The next contention is that the assessing authority is not justified in restricting the claim of shortage to 8% from the claim of 11%. The learned Chartered Accountant has not produced any evidence to substantiate the contention. Considering the fact that there was no garbling process S.T.Rev.No. 168 of 2008 -4- the wastage of 11% claimed by the appellant is actually high. The driage restricted to 8% by the assessing authority is seems to be with valid materials. So the contention of the Chartered Accountant is overruled and the estimated addition made by the assessing authority by restricting the wastage to 8% is confirmed.” 5. This finding of fact by both the authorities is confirmed by the Tribunal in its order dated 10-10-2006. The order passed by the Tribunal is as under: “5. The next issue is the disallowance of the claim of shortage of 11% towards dried ginger. The authorities below limited it to 8%. As there was no garbling process, the wastage of 11% claimed by the appellant is on the higher side. So we confirm the orders of the authorities below. Both the issues are found in favour of the Revenue.” 6. There is concurrent finding of fact by the authorities under the Act as well as by the Tribunal which is also the last fact finding authority. This concurrent finding of fact cannot be disturbed by us in this tax revision case filed under Sec.41 of the Kerala General Sales Tax Act, unless the finding of fact by the authorities is fully perverse or arbitrary. 7. In that view of the matter, we do not see any good S.T.Rev.No. 168 of 2008 -5- grounds even to admit this tax revision case. Accordingly, the Tax Revision Petition requires to be rejected and it is rejected. Ordered accordingly. (H.L.DATTU) CHIEF JUSTICE (A.K.BASHEER) JUDGE MS