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 18TH JUNE 2008 / 28TH JYAISHTA 1930 S.T.Appeal No.15 of 2006 -------------------------------------------- (ORDER NO.R4/3618/04/CT/ Dated 24-3-2006 OF COMMISSIONER OF COMMERCIAL TAXES, THIRUVANANTHAPURAM) .................... APPELLANT: ------------------ M/S.SAFA ENTERPRISES, KODUNGALLUR, REPRESENTED BY ITS PARTNER, K.A.KOCHUMOHAMMED. BY ADV. SMT.S.K.DEVI SRI.M.RAJ MOHAN SRI.SANTHOSH P.ABRAHAM SRI.FRANKUR D.JAYAN SMT.DEEPSUR D.JAYAN SRI.K.P.PRADEEP (PAYYANNUR) SRI.SHANMUGHAM D. JAYAN RESPONDENT: --------------------- STATE OF KERALA, REPRESENTED BY ITS FINANCE SECRETARY, SECRETARIAT, THIRUVANANTHAPURAM. BY SPECIAL GOVERNMENT PLEADER SRI.VINOD CHANDRAN. THIS SALES TAX APPEAL HAVING BEEN FINALLY HEARD ON 18/06/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: H.L. DATTU, C.J. & A.K. BASHEER, J. ------------------------------------------------------- S.T.A.No. 15 of 2006 ------------------------------------------------------- Dated, this the 18th day of June, 2008 JUDGMENT H.L.Dattu, C.J. Since the legal issues involved in this sales tax appeal are squarely covered by the decision of this Court as well as the decision of the Apex Court, the facts in extenso need not be noticed by us. It is suffice to state that the assessee is a dealer registered under the provisions of the Kerala General Sales Tax Act (“Act” for short). 2. In this appeal, the appellant calls in question the correctness or otherwise of the orders passed by the Commissioner of Commercial Taxes in exercise of his powers under Section 37 of the Act. By the impugned order, the Commissioner has reversed the orders passed by the Deputy Commissioner of Commercial Taxes for the assessment year 1999-2000. The questions of law framed by the assessee reads as under: 1). Whether the Commissioner is erred in cancelling the order of the Deputy Commissioner? 2). The liability to levy tax itself is under dispute, whether it is correct to levy interest on such tax? 3). The matter under consideration pertains to 1999- 2000 and even as on today the liability to pay tax on S.TA.No.15/2006 -2- the transfer value of DEPB licence is not decided by the Supreme Court whether the finding of the Commissioner that the Supreme Court has held that the DEPB licence are goods exigible to tax prior to the assessment in question is correct? 3. In view of the answer that we would be giving on question Nos. 2 and 3, the first question also requires to be answered against the assessee and in favour of the Revenue. In so far as the second question of law is concerned, in our view, the said question is no more res integra in view of the observations made by this Court in the case of M/s.Chandramani Traders Vs. State of Kerala (S.T.Rev.No.339/2003) disposed of on 7th April, 2008. In the said decision this Court has observed as under: “33. In Maruthi Wire Industries case, the Apex Court was dealing with the question as to whether the assessee was liable to pay interest under Section 23 (3) of the Act from the date the return was due though neither return as envisaged under the Act had been filed nor tax had been paid on self assessment basis. The Apex Court has taken the view that the liability of the assessee to pay sales tax could have arisen on return of turnover being S.TA.No.15/2006 -3- filed by self assessment or else an order of assessment being made. To come to the aforesaid conclusion, reliance is placed on the decision of the Apex Court in Associated Cement Co.Ltd's case and J.K.Synthetics case. In our view, the decision on which reliance is placed by the learned counsel for the assessee may not be of much assistance to the assessee, since the fact situation in that case was entirely different from the fact situation in the present case. In the present case, the assessee has filed his return conceding a particular turnover by way of self assessment and in that had claimed concessional rate of tax. The assessee was fully aware, unless he produces declaration forms No.18 from the purchasing dealer, that he would be disentitled to claim concessional rate of tax. In view of the language employed in the section itself and in spite of it, he had paid lesser rate of tax than what is specified in the Schedule to the Act. Since the assessee had not paid tax on the admitted turnover at the specified rate of tax, this is a case where tax due under the Act is not paid and therefore, the petitioner cannot escape the rigour of the penal provision under the Act. 34. The learned counsel for the assessee has also placed reliance on the observations made S.TA.No.15/2006 -4- by this Court in the case of P.K.Damodaran Vs. State of Kerala, 138 STC 442. In that case,the court primarily relying on the observations made by the Apex Court in Maruthi Wire Industries Pvt Ltd's case has granted the relief to the assessee. As we have already stated how the decision of the Apex Court cannot be applied to the facts and circumstances of the present case, it may not be necessary for us to consider in depth the observations made by this Court in Damodaran's case. 35. The learned counsel for the assessee has also invited our attention to certain observations made by this Court in the case of Evershine Plastics Vs. Asst. Commissioner, 120 STC 396, Protech Appliances Vs. Asst. Commissioner (2002) 127 STC 332 and P.K.Alihaji Vs. Board of Revenue, (2007) 15 KTR 101. All these decisions are rendered in the light of what has been said by the Apex Court in Maruthi Wire Industries case. Therefore, in our view, the observations made in those decisions may not assist the learned counsel, Sri.Harishankar V.Menon, for the assessee. 36. The learned counsel for the revenue has brought to our notice the observations made by S.TA.No.15/2006 -5- this Court in the case of M/s.Miracle Elastomer (India) Ltd. Vs. Commissioner of Sales Tax, 2006 (2) KLJ 105, wherein it is stated. “Assessee cannot escape from the payment of interest since it had not disclosed the turnover in the return filed. The assessee was well aware of the fact that the SSI exemption limit expired on 8- 10-1999 a fact which is in the exclusive knowledge of the assessee and not the assessing authority. Section 23(3) states that if tax or any other amount assessed or due under the Act is not paid by any dealer or other person within the time prescribed therefor, the dealer shall pay interest in the manner prescribed, in addition to the amount due. The assessee should have paid tax on the expiry of the exemption period. The assessee has failed to pay the tax also with the return. The tax was due to the State once the period of SSI exemption expired. Since the assessee's turnover had exceeded the exemption limit necessarily he should have disclosed the correct turnover in the return and should have paid the tax due under the Act which he has not done and therefore, in our view, sub-section (3) of Section 23 would squarely apply.” 37. We are in respectful agreement with the S.TA.No.15/2006 -6- reasoning and conclusions reached by the learned Judges in the aforesaid decision.” In view of the law laid down by this Court, the second question of law requires to be answered against the assessee and in favour of the Revenue. 4. In so far as the third question of law is concerned, the same is no more debatable in view of the dicta laid down by the Apex Court in the case of M/s.Yasha Overseas & Others Vs. Commissioner of Sales Tax & Others (Civil Appeal No.2155/2000 and connected matters) disposed of on 6-5-2008. In the said decision, the Supreme Court has stated as under: “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.” 6. Therefore, in view of the above, the third question of law raised by the assessee requires to be answered against the assessee and in favour of the Revenue. In view of the answers given by us on second and third questions of law framed by the assessee, the first question of law raised by the assessee naturally requires to be answered S.TA.No.15/2006 -7- against the assessee and in favour of the Revenue. 7. Consequently, I.A.No.3440/2006 is closed. Ordered accordingly. (H.L.DATTU) CHIEF JUSTICE (A.K.BASHEER) JUDGE MS