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 23RD OCTOBER 2008 / 1ST KARTHIKA 1930 S.T.Rev.No.284 of 2008 -------------------------------- ORDER DATED 25.10.2006 IN T.A.25/2006 OF THE KERALA SALES TAX APPELLATE TRIBUNAL, ADDITIONAL BENCH, KOTTAYAM. (ASSESSMENT YEAR 2002-03) .................... REVISION PETITIONER/APPELLANT/ASSESSEE:- -------------------------------------------------------------------- SABIL RAJ, PADMA COMMUNICATIONS, ALAPPUZHA. BY ADV. SMT.S.K.DEVI SRI.SANTOSH P.ABRAHAM RESPONDENT/RESPONDENT/REVENUE:- ----------------------------------------------------------- STATE OF KERALA , REPRESENTED BY ITS FINANCE SECRETARY, SECRETARIAT, THIRUVANANTHAPURAM. BY SENIOR GOVERNMENT PLEADER SRI.MUHAMMED RAFIQ THIS SALES TAX REVISION HAVING COME UP FOR ADMISSION ON 23/10/2008, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:- H.L.Dattu,C.J. & A.K.Basheer,J. -------------------------------------------- S.T.Rev.No.284 of 2008 -------------------------------------------- Dated, this the 23rd October, 2008 ORDER H.L.Dattu,C.J. The assessee before us, is a dealer in Online Lottery Tickets, as an agent of M/s.Benja Agency, Palakkad. (2) For the assessment year 2002-03, the Sales Tax Officer has completed the final assessments, by resorting to the best judgment assessment, estimating the taxable turnover of the assessee in a sum of Rs.25 lakhs. (3) The quantification so made by the assessing authority was called in question by the assessee before the first appellate authority. The primary contention that was urged before the first appellate authority was, that, the first seller, viz., M/s.Benja Agency, has already paid tax under Section 5BA of the Kerala General Sales Tax Act, 1963 (“Act” for short) and since the assessee is only a Commission Agent, M/s.Benja Agency has paid commission to the assessee after deducting the tax due under the Act. (4) The first appellate authority has not accepted this contention of the assessee. However, being of the opinion, that, the estimation made by the assessing authority was on a higher side, has reduced the sales turnover of the assessee in so far as the lottery tickets are concerned, to Rs.15 lakhs, instead of Rs.25 lakhs as quantified by the assessing authority. S.T.Rev.284 of 2008 - 2 - (5) The assessee had called in question the orders passed by the first appellate authority before the Sales Tax Appellate Tribunal, Additional Bench, Kottayam. One of the contentions canvassed before the Tribunal was, that, in view of the decision of the apex Court rendered in the case of Sunrise Associates v. Government of NCT of Delhi [(2006) 145 STC 576 (SC)], which was decided on 28.04.2006, the sales of lottery tickets are not exigible to levy tax under the Act. This contention of the assessee is rejected by the Tribunal, on the ground, that, the assessment year in question is 2002-03 and the ruling of the apex Court in Sunrise Associates' case is prospective and, therefore, would not apply to the assessment year in question. (6) Aggrieved by this finding and conclusion reached by the Tribunal, the assessee is before us in this revision petition. (7) The assessee has framed the following questions of law for our consideration. They are as under: “i) Whether the Tribunal is right in upholding the assessment which levies tax on the sales turnover of paper lottery? ii) Whether the order of the Tribunal is correct in the light of the decision of the Hon'ble Supreme Court in the case of M/s.Sunrise Associates reported in (2006) 145 STC 576? iii) Whether the Tribunal is right in holding that petitioner had not produced any proof for the fact that he is agent of M/s.Benja Agencies, Palakkad when the details are part of the records? S.T.Rev.284 of 2008 - 3 - (iv) Whether the Tribunal is erred in holding that petitioner is liable to tax when the principals remitted the tax?” (8) Sri.Santhosh P.Abraham, learned counsel appearing for the petitioner, at the time of hearing of the revision petition, has brought to our notice the observations made by the apex Court in the case of State of U.P. and another v. Sugal & Damani [(2007) 8 VST 469 (SC)]. In the said decision, the apex Court has explained the concept of the prospective ruling. The observations made by the apex Court is as under:- “Where a provision of a taxing statute is declared ultra vires but the Supreme Court only prospectively overrules, then neither the State is liable to refund tax already collected thereunder prior to the judgment, nor entitled to collect further tax for the period prior to the date of the judgment”. (9) In the instant case, we cannot find fault with the orders passed by the Tribunal, for the reason, that, the assessment year in question is 2002-03 and the judgment of the apex Court in Sunrise Associates' case is only on 28.04.2006. The apex Court, in the said decision, has observed, that, the law declared by them is prospective and it would not apply to the previous assessment years. (10) In view of the above, we cannot take exception to the orders passed by the Tribunal. (11) In Sugal & Damani's case, the apex Court has stated the effect of the prospective ruling of the apex Court. In that, the thinking of the S.T.Rev.284 of 2008 - 4 - apex Court is, that, if, for any reason, the assessee has already paid the taxes due under the Act, the State is not liable to refund the tax already collected nor entitled to collect tax for the period prior to the date of judgment. (12) This decision of the apex Court can be made use of by the assessee, if, for any reason, the State Government/Commercial Taxes Department issue any notice for payment of tax for the assessment year 2002-03. (13) With this observation, the revision petition is disposed of. Ordered accordingly. H.L.Dattu Chief Justice A.K.Basheer vku/- Judge