IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE B.P.RAY TUESDAY, THE 30TH NOVEMBER 2010 / 9TH AGRAHAYANA 1932 ST.Rev..No. 115 of 2010() ------------------------- TA.281/2008 of S.T.A.TRIBUNAL,ERNAKULAM .................... REVISION PETITIONER/ASSESSEE ------------------------------------------------ M/S.ICI INDIA LTD,KALOOR,CHAMMINI ROAD, ERNAKULAM REPRESENTED BY ITS REGIONAL COMMERCIAL MANAGER SRI.C.V.RAJESH KUMAR. BY ADV. SRI.S.SANTHOSH KUMAR SRI.S.VINODKUMAR SMT.P.LISSY JOSE. RESPONDENT/REVENUE ---------------------- STATE OF KERALA,REPRESENTED BY THE SECRETARY TO GOVERNMENT,TAXES DEPARTMENT, SECRETARIAT,THIRUVANANTHAPURAM. BY SPL. G.P. SRI.VINOD CHANDRAN THIS SALES TAX REVISION HAVING BEEN FINALLY HEARD ON 30/11/2010, THE COURT ON 30/11/2010 DELIVERED THE FOLLOWING: C.N.RAMACHANDRAN NAIR & BHABANI PRASAD RAY, JJ. .................................................................... S.T. Rev. No.115 of 2010 .................................................................... Dated this the 30th day of November, 2010. JUDGMENT Ramachandran Nair, J. The question raised is whether the Tribunal was justified in confirming the assessment and demand of tax on the turnover of paint mixing machines. We have heard counsel appearing for the petitioner and Sri.Vinod Chandran, Special Government Pleader appearing for the respondent. 2. The case of the petitioner is that the machines were given free of cost to the dealers who are engaged in sale of petitioner's products namely, paint. Special Government Pleader by referring to documents available in the assessment records submitted that petitioner has even raised bills on dealers collecting the price for the machines. Further, in the 50B certificate of account furnished petitioner has claimed exemption of Rs.11 lakhs and odd towards value of machines supplied. Counsel for the petitioner submitted that machines are supplied free of cost to dealers under the agreement and ownership is retained by the 2 Company. 3. After hearing both sides and after going through the orders of the lower authorities, we feel the matter requires reconsideration with reference to records, agreements and the records of the dealers which the department is free to call for and verify. The mere fact that petitioner has issued F Form for interstate stock transfer declaring the purpose as “for resale” does not mean that tax could be levied if machines are supplied by the Company to dealers by retaining ownership with the Company. If Company retains ownership, then it may be replacing machines or repairing it as and when the machine becomes old or damaged. In the circumstances, we feel a detailed enquiry is called for by verifying accounts of the petitioner and the dealers, and by verifying the agreements. If there is misuse of F Form, recourse open to the officer is not assessment or levy of tax. We, therefore, dispose of the revision by remanding the matter to the Assessing Officer after vacating the findings of the Tribunal and that of 3 the first appellate authority for fresh consideration after giving opportunity to the assessee. C.N.RAMACHANDRAN NAIR Judge BHABANI PRASAD RAY Judge pms