H.l.dattu, C.j v. Commissioner Of Income Tax, 247 Itr 178, Has Stated

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HON'BLE THE CHIEF JUSTICE MR.H.L.DATTU & THE HONOURABLE MR. JUSTICE A.K.BASHEER MONDAY, THE 4TH AUGUST 2008 / 13TH SRAVANA 1930 TRC.No. 185 of 1997 --------------------- TA.217/1988 of SALES TAX APPELLATE TRIBUNAL, ADDITIONAL BENCH,THIRUVANANTHAPURAM. .................... REVISION PETITIONER/APPELLANT/REVENUE : ------------------------------------------------------------------ DEPUTY COMMISSIONER OF SALES TAX (LAW),BOARD OF REVENUE (TAXES),ERNAKULAM. BY SPL. GOVERNMENT PLEADER, SRI.VINOD CHANDRAN. RESPONDENT/RESPONDENT/ASSESSEE : -------------------------------------------------------- SRI.N. JAYAPRAKASH,PACKAGE INDIA,KOLLAM. BY ADV. DR.K.B.MUHAMED KUTTY (SR.) THIS TAX REVISION CASE HAVING BEEN FINALLY HEARD ON 04/08/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: H.L.DATTU, C.J. & A.K.BASHEER, J. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Dated this the 4[th] day of August 2008 O R D E R H.L.DATTU, C.J. In this revision petition filed, the Revenue has raised a simplequestion of law, for our consideration and decision. The question is,whether tin containers sold by the petitioner is exigible to levy of taxunder Entry 45 of 1[st] Schedule or under Entry 116 of first Schedule toKerala General Sales Tax Act? 2. In the hierarchy of authorities under the Act, the Tribunal is thelast fact finding authority. The Tribunal while disposing of TA No.217 of1988, dated 06.06.96, has specifically stated that the tin containers sold bythe assessee are manufactured using thin iron sheets. This finding of factby the Tribunal is not disputed by the revenue. They have not even statedthat the finding of fact by the Tribunal is a perverse finding and therefore,a question of law would arise for our consideration and consequentdecision. The Apex Court in the case of K.Ravindranathan Nair vs.Commissioner of Income Tax, 247 ITR 178, has stated:- “It is the Tribunal which is the final factfinding authority. A decision of the Tribunal on thefacts can be gone into by the Court only if a question has been referred to it which says that the findingof the Tribunal on the facts is perverse, in the sense that, itis such as could not reasonably have been arrived at on thematerial placed before the Tribunal. Unless and untilfinding of fact reached by the Tribunal is canvassed beforethe High Court in the manner set out above, the High Courtis obliged to proceed upon the findings of fact reached bythe Tribunal and to give an answer in law to the question oflaw that is before it. The only jurisdiction of the High Courtin a reference application is to answer the questions of lawthat are placed before it. It is only when a finding of theTribunal of fact is challenged as being perverse, in thesense set out above, that a question of law can be said toarise”. 3. The assessee is a dealer in tin, tin sheets and tin containers. He had filed his annual returns for the assessment year 1984-85. The assessing authority hascompleted the best judgment assessment for the assessment year in question. In sofar as the sale of tin containers are concerned, the assessing authority has stated asunder: “Similarly it is contented that the containers being Iron andSteel articles they are assessable at the rate of 6% as itemsfalling under Sl.No.45 of the 1[st] schedule. In support of thiscontention he has quoted the decision of the DeputyCommissioner(Appeals), Quilon No.STA.388/85 dated 25.6.86. 3. The assessee is a dealer in tin, tin sheets and tin containers. He had filed his annual returns for the assessment year 1984-85. The assessing authority hascompleted the best judgment assessment for the assessment year in question. In sofar as the sale of tin containers are concerned, the assessing authority has stated asunder: “Similarly it is contented that the containers being Iron andSteel articles they are assessable at the rate of 6% as itemsfalling under Sl.No.45 of the 1[st] schedule. In support of thiscontention he has quoted the decision of the DeputyCommissioner(Appeals), Quilon No.STA.388/85 dated 25.6.86. Containers will fall under item No.121 i.e., allmetalic products other than those specified elsewhere inthis schedule or second schedule and hence taxable at therate of 8%. As stated above the assessee has sold this itemat the rate of 8%. Similar other dealers are also sellingempty tines at the rate of 8%. Second appeals are pendingbefore the sales tax Appellate Tribunal, Trivandrumagainst the decisions of the Deputy Commissioner(Appeals), Quilon in this regard. As this is the position, Icannot accept the contention of the assessee. This will beassessed at the rate of 8% as proposed.” 4. The assessee, being aggrieved by the said order passed by the assessing authority, had carried the matter in appeal before the first appellate authority. Thesaid authority has allowed the assessee's appeal and has directed the assessingauthority to levy tax at the rate of 6% only, treating the item as a commodityfalling under Entry 45 of First Schedule to Kerala General Sales Tax Act. Theorders passed by the first Appellate Authority is as under : “The other contentions pertains to the levy of tax at 8% onthe sales of tin containers. The appellant argues that thetin containers fall under entry 45 of the first schedule tothe K.G.S.T. Act, 1963 exigible to tax only at 6% asagainst the rate of 8% adopted by the assessing authority.As per this entry the iron and steel articles not mentioned elsewhere in the first schedule to the K.G.S.T. Act, 1963eligible to tax only at 6% as against the rate of 8%adopted by the assessing authority. As per this entry theiron and steel articles not mentioned elsewhere in the firstschedule or second schedule to the said Act is assessableto tax at the rate of 6% at the point of first sale in the stateby a dealer who is liable to tax under Section 5. I haveexamined this issue and found that the like of argument ofthe appellant goes in the right direction and the correctrate of tax applicable to tin containers in the instant caseis 6% since the items of goods fall under entry 45 of theFirst Schedule to the K.G.S.T. Act, 1963. Now the appellant has obtained and produced declarationin Form No.18 in support of the claim of concessionalrate of tax under Sec.5(7) of the K.G.S.T. Act, 1963. Thedeclaration have since been obtained for a turnover ofRs.3,84,904.17. The appellant is at liberty to producethese statutory declaration forms before the assessingauthority, who will consider them and grant eligible taxrelief to the appellant.” 5. The revenue had carried the matter by way of second appeal before the Tribunal in TA No.217/88. The Tribunal by its order dated 06.06.96, has rejectedthe appeal and confirmed the order passed by the first Appellate Authority. In thesaid order the Tribunal has stated as under: “Tin containers are manufactured using thin iron sheets.”(Emphasis supplied). 6. The revenue, being aggrieved by the orders passed by the Tribunal, is before us in this Tax Revision Case. The revenue has framed the followingquestions of law for our consideration and decision. They are as under: “a)Is the Tribunal correct in law in its conclusion thatturnover in respect of tin containers would fall underentry 45 of the then First Schedule of the K.G.S.T. Act?b) Is not 'this containers', on a proper interpretationfall under entry 116 of the then first Schedule to theK.G.S.T. Act?” Tribunal in TA No.217/88. The Tribunal by its order dated 06.06.96, has rejectedthe appeal and confirmed the order passed by the first Appellate Authority. In thesaid order the Tribunal has stated as under: “Tin containers are manufactured using thin iron sheets.”(Emphasis supplied). 6. The revenue, being aggrieved by the orders passed by the Tribunal, is before us in this Tax Revision Case. The revenue has framed the followingquestions of law for our consideration and decision. They are as under: “a)Is the Tribunal correct in law in its conclusion thatturnover in respect of tin containers would fall underentry 45 of the then First Schedule of the K.G.S.T. Act?b) Is not 'this containers', on a proper interpretationfall under entry 116 of the then first Schedule to theK.G.S.T. Act?” 7. For resolving the dispute raised by the revenue, the relevant entriesrequires to be noted. They are as under: TRC No. 185/1997 8. In the normal course, we would not have accepted the stand of theassessee, that, the tin containers sold by them would fall under Entry 45 of firstSchedule to the K.G.S.T. Act, because the said entry speaks of iron and steelarticles not mentioned elsewhere in this Schedule or Second Schedule. The Entry116 of the first Schedule to the K.G.S.T. Act speaks of tin including tin sheets andtin plates. It baffles the perception of any reasonable person that tin containercould be an article manufactured out of iron sheets. The articles sold by theassessee would either come under Entry 116 or Entry 126 of first Schedule to theK.G.S.T. Act, which again speaks of metallic products other than those specificallymentioned elsewhere in this schedule or second Schedule. 9. However, the Tribunal, which is the last fact finding authority, in itsorder specifically observes, that the item sold by the assessee namely, tincontainers, are manufactured using thin iron sheets. That finding of fact is notquestioned by the revenue on the ground that the said finding is a perverse finding.Since the last fact finding authority has come to the conclusion that what is sold byassessee is an article made out of iron sheets, in our opinion, necessarily has to fallunder Entry 45 of first Schedule to the K.G.S.T. Act. 10. In that view of the matter, we do not find any good reason to interferewith the orders passed by the Tribunal. Accordingly, the revision requires to berejected and it is rejected. The decision rendered by us is purely based on the facts TRC No. 185/1997 as noticed by the Tribunal. This order shall not be treated as a precedent in anyother case, since we have decided this case in the peculiar facts and circumstancesof the case, which facts is not disputed by the Revenue. Ordered accordingly. (H.L.DATTU)CHIEF JUSTICE (A.K.BASHEER) JUDGE ttb/dk.