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Bhagwan Ganesh Pai Company Vs. State of Kerala - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtKerala High Court
Decided On
Case NumberT.R.C. No. 47 of 1970
Judge
Reported in[1971]28STC460(Ker)
AppellantBhagwan Ganesh Pai Company
RespondentState of Kerala
Appellant Advocate V. Rama Shenoi and; R. Raya Shenoi, Advs.
Respondent Advocate M.I. Joseph, Government Pleader
DispositionPetition allowed
Cases ReferredIn Kishinchand Chellaram v. Joint Commercial Tax Officer
Excerpt:
- .....section 10 of the kerala general sales tax act, 1963, for the reason that nylon yarn is artificial silk yarn. the tribunal has not specifically considered the point raised by the assessee.2. the plea on behalf of the revenue that the point was not raised before the tribunal cannot be accepted for the reason that ground no. 4 before the tribunal deals with the specific point mooted before us.3. the notification referred to exempts staple fibre yarn and artificial silk yarn from sales tax at all points in the series of sales by successive dealers except the point of first sale in the state by a dealer who is liable to tax under section 5 of the act. the said notification also makes a reduction in rate in respect of the said goods from 3 per cent. to 2 per cent.4. the only question which.....
Judgment:

T.S. Krishnamoorthy Iyer, J.

1. The petitioner who is a firm dealing in different varieties of yarn including nylon contended that the turnover of the sale of nylon yarn during the assessment year 1966-67 is liable to sales tax at the point of first sale only in the series of sales by successive dealers in the State at the reduced rate of 2 per cent. in view of the Notification No. G.O. Ms. 361/64/Rev. dated 4th June, 1964, issued by the Kerala Government under Section 10 of the Kerala General Sales Tax Act, 1963, for the reason that nylon yarn is artificial silk yarn. The Tribunal has not specifically considered the point raised by the assessee.

2. The plea on behalf of the revenue that the point was not raised before the Tribunal cannot be accepted for the reason that ground No. 4 before the Tribunal deals with the specific point mooted before us.

3. The notification referred to exempts staple fibre yarn and artificial silk yarn from sales tax at all points in the series of sales by successive dealers except the point of first sale in the State by a dealer who is liable to tax under Section 5 of the Act. The said notification also makes a reduction in rate in respect of the said goods from 3 per cent. to 2 per cent.

4. The only question which should have been decided is whether 'nylon yarn' is 'artificial silk yarn' to attract the benefit of the said notification. In Kishinchand Chellaram v. Joint Commercial Tax Officer [1968] 21 S.T.C. 367 the Madras High Court took the view that the expression 'artificial silk' in item 4 of the Third Schedule of the Madras General Sales Tax Act, 1959, will take in 'nylon' and is therefore exempt from sales tax. It is no doubt true that the decision interpreted the expression 'artificial silk fabrics' in item 4 of the Third Schedule of the Madras Act. But the said decision discusses the nature of 'nylon'. In view of the discussion in that decision, the learned Government Pleader did not very seriously dispute the proposition that nylon yarn is artificial silk yarn coming within the meaning of the said notification. If so, the claim of the assessee has only to be upheld. We, therefore, hold that the turnover of the nylon yarn of the petitioner has to be assessed for the assessment year 1966-67 at the reduced rate of 2 per cent. on the basis of the Government notification No. G.O. Ms 361/64/Rev. dated 4th June, 1964, issued under Section 10 of the Kerala General Sales Tax Act, 1963. The revision case is allowed to that extent. But we make no order as to costs.


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