IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE K.SURENDRA MOHAN TUESDAY, THE 7TH APRIL 2009 / 17TH CHAITHRA 1931 ST.Rev..No. 86 of 2009() ------------------------ TA.129/2008 of S.T.A.T.ADDL.BENCH,ERNAKULAM .................... REVISION PETITIONER/ASSESSEE/APPELLANT: -------------------- SRI. M.J. THOMAS, SON AND LEGAL HEIRS OF SMT. CHINNAMMA JOSE, PROPRIETRIX, JOSE DAVIS & CO.,. OLLUR TRICHUR DIST. BY ADV. SRI.E.P.GOVINDAN RESPONDENT: --------------- STATE OF KERALA, REP. BY SECRETARY, TAXES, DEPARTMENT, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM. BY GOVERNMENT PLEADER SRI.V.K.SHAMSUDEEN THIS SALES TAX REVISION HAVING COME UP FOR ADMISSION ON 07/04/2009, THE COURT ON THE SAME DAY PASSED THE FOLLOWING: C.N.RAMACHANDRAN NAIR & K.SURENDRA MOHAN, JJ. ------------------------------------------------------------------------------------ S.T.Rev. NO: 86 OF 2009 ----------------------------------------------------------------------------------- Dated this the 7th April, 2009. JUDGMENT RAMACHANDRAN NAIR, J. Heard counsel for the petitioner and Govt. Pleader for the respondent. The challenge is against assessment under Section 5A confirmed by the Tribunal. Petitioner was engaged in purchase and sale of packing materials. Sales are partly interstate and partly for export covered by Section 5(3) of the CST Act. The claim of the petitioner is that since goods purchased are sold in the course of export petitioner is entitled to exemption on purchase turnover also. This argument is not tenable because what is exempt under Section 5(3) sale proceeding is the export sale and not the purchase by the petitioner prior to his sale. In other words tax is payable under Section 5A as purchase are made from unregistered dealers and it is seen that petitioner is granted exemption under Section 5(3) on sales to exporters for complying with order for export. We therefore answer the first question raised in the sales tax revision against the assessee. 2. The next contention raised pertains to rate of tax assessed S.T.Rev. No: 86/2009 2 under Section 5A. The case of the department is that item purchased is timber and therefore, tax under vth schedule is 12%. Counsel for the petitioner pointed out that petitioner has no manufacturing facility and petitioner acted only as a trader in packing materials which attracts tax at 4%. We find force in this contention because purchase made by a dealer in packing material can only be packing material as such. There is no evidence for the department to contend that petitioner purchased timber, converted into packing material and sold the same. We therefore allow the sales tax revision on this issue by reversing the order of the Tribunal and that of the first appellate authority and hold that petitioner is liable to pay tax on purchase turnover under Section 5A only at 4% under entry 102 of the I schedule to the KGST Act. The Assessing Officer is directed to revise the assessment on purchase turnover at lower rate as stated above. C.N. RAMACHANDRAN NAIR Judge K. SURENDRA MOHAN Judge jj S.T.Rev. No: 86/2009 3 K.K.DENESAN & V. RAMKUMAR, JJ. ---------------------------------------------------- M.F.A.NO: ----------------------------------------------------- JUDGMENT Dated: