NDLI: K.v. Abdul Kader, Proprietor Kevee Supari Traders Vs. State of Kerala and Ors.

Content Provider	Supreme Court of India
e-ISSN	30484839
Language	English
Access Restriction	NDLI
Subject Keyword	1963: Explanation to Section 2 (xxvi) 5 and 5-A Sales Tax: Kerala General Sales Tax Act Sections 8 (b)
Content Type	Text
Resource Type	Law Judgement
Jurisdiction	India
Act(s) Referred	Kerala General Sales Tax Act, 1963 (15 of 1963)
Case Type	Appeal
Court	Supreme Court of India
Disposal Nature	Appeal Dismissed
Headnote	Sales Tax:Kerala General Sales Tax Act, 1963-Explanation to Section 2 (xxvi), Sections 8 (b), 5 and 5-A-Sales Tax-Last Purchase-By amending Act No.6 of 1988, explanation to Section 2 (xxvi) made subject to the provisions of Section 8(b)-Effect of-Held, goods exported by assessee to agents outside the State and part remaining thereof at the end of the financial year deemed --{ to attain the quality of last purchase by virtue of Section 8(b) and exigible to tax . Interpretation of Statutes-External aid-Statement of Objects And Reasons could be relied upon. The legal position prior to the amendment of 1988 was that a dealer was not liable to pay sales tax on purchases of goods until the goods acquired the quality of last purchase inside the State. The explanation to Section 2 (xxvi) of the Kerala General Sales Tax Act was added by Act No. 21 of 1978 to give effect to the said judgment. The Division Bench of the Kerala High Court in the case of Deputy Commissioner of Sales Tax (Law), Board of --< Revenue (Taxes), Trivandrum v. Keveyam & Co. and Others, (1986) 63 STC, 387, held that closing stock of an assessee whether inside or outside the State was not exigible to tax. As a result of the said decision the Government was losing huge amount of revenue and inorder to overcome the situation, Act No.6 of 1988 was introduced where by explanation to S. 2 (xxvi) was made subject to the provisions of Section 8 of the Act.The appellant, dealer in arecanuts has agents outside the State as well . He paid sales tax by working out the purchase value on the sales effected by the agent and the tax on the remaining stock was paid as and when the stock was sold. For the period 1987-88 the Sales Tax Officer disallowed the appellant's claim that the closing stock valued at Rs. 38,91,289.52 pending with the agents outside the State be excluded from taxation and vide order dated November 30, 1989, sent a demand of Rs. 1,79,400.00 and surcharge of Rs. 11,953.00. The order of assessment was challenged before the High Court and was dismissed. The writ appeal was also dismissed. Hence this appealThe legal position prior to the amendment of 1988 was that a dealer was not liable to pay sales tax on purchases of goods until the goods acquired the quality of last purchase inside the State. The explanation to Section 2 (xxvi) of the Kerala General Sales Tax Act was added by Act No. 21 of 1978 to give effect to the said judgment. The Division Bench of the Kerala High Court in the case of Deputy Commissioner of Sales Tax (law), Board of Revenue (Taxes), Trivandrwn v. Keveyam & Co. and Others, (1986) 63 STC, 387, held that closing stock of an assessee whether inside or outside the State was not exigible to tax. As a result of the said decision the Government was losing huge amount of revenue and in order to overcome the situation, Act No.6 of 1988 was introduced whereby explanation to S. 2 (xxvi) was made subject to the provisions of Section 8 of the Act.The contention raised by the appellant was that though the amendment to explanation to Section 2(xxvi) makes it subject to the provisions of Section 8, the language in the said section is not sufficient to impute when the goods held by an assessee outside the State attained the quality of last purchase. Therefore, the said amendment has not achieved the intended object.
Judge	Honble Mr. Justice V.N. Khare
Neutral Citation	1998 INSC 47
Petitioner	K.v. Abdul Kader, Proprietor Kevee Supari Traders
Respondent	State Of Kerala And Ors.
SCR	[1998] 1 S.C.R. 411
Judgement Date	1998-01-29
Case Number	2214

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K.v. Abdul Kader, Proprietor Kevee Supari Traders Vs. State of Kerala and Ors.

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