Case: Nilambur Rubber Company Limited Vs. State of Kerala &amp; Others

We shall deal with the facts for the assessment yearThe facts for the assessment yearany owns substantial estates in the State of Kerala and plants rubber thereon. The latex which is obtained from the rubber trees is converted into rubber sheets and sold in Kerala and outside. We are here concerned with sales made outside Kerala, The assessing authority found that the company was a dealer within the meaning of that word in the Central Sales Tax Act and he made an assessment upon that basis. The Appellate Assistant Commissioner confirmed the assessment. The company approached the Sales Tax Tribunal, which reversed the view taken by the lower authorities. It did so upon the basis that it had not been established that the company was actually engaged in the purchase and/or sale of rubber or that the objects specified in the companys Memorandum and Articles of Association were actually being carried on. In the absence of any finding by the assessing authority that the company was actually engaged in the business of purchase and sale, the Tribunal was unable to accept the Revenues contention that the company fell within the definition of "dealer". The Revenue filed a tax revision case before the High Court at Kerala against the findings of the Tribunal. The High Court noted that the definition of "dealer" was very wide and remanded the matter to the Tribunal to find out the intention with which the company had formed a selling organisation and other relevant facts. The Tribunal, on remand, found that the amended definition of the term "dealer" was wide enough to take in the company. It said :"Considering the amended provisions defining business and dealer in the CST Act together with the various clauses of Memorandum and Articles of Association of thewe find that the transactions of the company will come squarely under the terms business and dealer and so, they are liable to be assessed under the CST Act. The fact that the appellants are registered under the CST Act and they have collected CST on theirsales is also evident from the records." *From the decision of the Tribunal on remand the company moved the High Court in revision. By its brief judgment referring to an earlier judgment where the same question had been considered in some detail, the High Court held that the company was engaged in a regular systematic activity and when it sold rubber produced by itit was a dealer. The revision was, therefore, dismissed, and the company is here against the order by special leave.

Reasoning:
4. In the present case, despite the remand ordered by the High Court earlier, the Revenue failed to bring on record facts which would justify the conclusion that the company is a dealer. The Revenue was the appellant in the two cases that we have just cited. It could not have been unaware of the onus that it was required to discharge, but it failed to do so. Even so, we are persuaded to remand the matter to the Tribunal so that the Revenue may have a last opportunity to produce such facts as are requisite to support its case. The company would, of course, also be entitled to lead such evidence as it thinks necessary to counter the Revenues case.