Judgment · High Court · 2008
Case at a glance
Provisions considered
Key paragraphs
- Para 33. The question of law framed by the assessee, in our opinion, is nomore debatable in view of the law declared by the apex Court in the case ofM/s.Yasha Overseas & Others v. Commissioner of Sales Tax & Others(Civil Appeal No.2155 of 2000 and other…
- Para 44. In view of the law declared by the apex Court, in our opinion, thequestion of law framed by the assessee requires to be answered against theassessee and in favour of the Revenue. Ordered accordingly. (H.L.DATTU) CHIEF JUSTICE (A.K.BASHEER) JUDGE vns
Judgment
H.L.DATTU, C.J. & A.K.BASHEER, J. ------------------------------------------ S.T.Rev. No.255 of 2005 ------------------------------------------ Dated, this the 9th day of June, 2008ORDERH.L.Dattu, C.J.The assessee is a dealer registered both under the provisions of the Kerala General Sales Tax Act, 1963 (the 'KGST Act' for short) and the CentralSales Tax Act, 1956 ('the CST Act' for short). This revision petition pertains tothe assessment year 1999-2000. The Tribunal by its order dated 10thDecember, 2004 in T.A.No.179 of 2004 has rejected the appeal. That is howthe assessee is before us in this revision petition.
The assessee has raised the following questions of law for ourconsideration and decision. They are as under:
a) Whether the decision of this court reported in 10 KTR245 requires reconsideration more so in light of the fact that the Honourable Supreme Court has referred the appeals filedagainst the said decision to a constitutional bench?b) Whether the finding of the tribunal that DEPB licencesare goods as defined in Section 2 clause (xii) of the KeralaGeneral Sales Tax Act is legally correct and sustainable?
The question of law framed by the assessee, in our opinion, is nomore debatable in view of the law declared by the apex Court in the case ofM/s.Yasha Overseas & Others v. Commissioner of Sales Tax & Others(Civil Appeal No.2155 of 2000 and other connected matters disposed of on6.5.2008). In the said judgment the apex Court at paragraphs 29 and 43 hasspecifically observed as under: “29. At this stage we feel obliged to put in a caveat inregard to the observations made in Sunrise about marketabilitybeing a feature of distinction between 'goods' proper andactionable claims. What was said in Vikas, as we understand S.T.Rev. No.255 of 20052it, was that the innate value of REP licence and its freetransferability made it into a market commodity. Theillustrations given in paragraphs 39 and 40 of the decision in Sunrise, namely, (i) a right on the fulfillment of certainconditions to call for delivery of goods mentioned in a contract,(ii) negotiable instruments, (iii) right to recover insurancemoney, (iv) a partner's right to sue for an account of adissolved partnership, (v) the right to claim the benefit of acontract not coupled with any liability, (vi) a claim for arrears ofrent and (vii) a right to the credit in a provident fund accountare all indeed transferable for consideration but none of theseis a market commodity.
The holder of any of the above rightsor claims may or may not be able to find a ready buyer at agiven time; conversely a prospective buyer may not find any ofthe above rights or claims available for purchase by going tothe market at any time. Contrary to this, REP licenses hadalways a market, that is to say, there were people willing to selland others willing to buy REP licenses at all times. Its innatevalue coupled with free transferability made REP licences intoa market commodity and it was that aspect of the matter that Vikas referred to for holding that REP licences could not beclassified as actionable claims. Those were goods properlyso-called having innate value and a ready market. The positionbecomes further clear by the completely contrasting findings in Sunrise (in regard to lottery tickets) and in Vikas (in regard toREP licences). In Sunrise after giving illustrations oftransferable actionable claims (paragraphs 39 and 40)paragraph 41 begins as: “A lottery ticket has no value itself.
It is a merepiece of paper” On the contrary, in Vikas paragraph 29 begins as follows: “The above provisions do establish that REPlicences have their own value. They are bought andsold as such”.We thus have not the slightest doubt in our mind that thedecision in Sunrise in no way affects the position insofar asREP licences are concerned and the legal position in regard totheir sale is concluded by the decision in Vikas”.xxxxxx
43. In light of the discussions made above, the twoquestions framed at the beginning of the judgment are to beanswered as follows: S.T.Rev. No.255 of 20053The Constitution Bench decision in Sunrise does not alter theposition in regard to levy of tax on sale of REP licence and onthat issue the three-Judge Bench decision in Vikas continues tohold the field.DEPB has an intrinsic value that makes it a market commodity. Therefore, DEPB, like REP licence qualifies as 'goods' withinthe meaning of the Sales Tax laws of Delhi, Kerala and Mumbaiand its sale is exigible to tax
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In view of the law declared by the apex Court, in our opinion, thequestion of law framed by the assessee requires to be answered against theassessee and in favour of the Revenue. Ordered accordingly. (H.L.DATTU) CHIEF JUSTICE (A.K.BASHEER) JUDGE vns
Questions this judgment answers
Which statutory provisions did this judgment involve?
theKerala General Sales Tax Act, 1963; CentralSales Tax Act, 1956; KeralaGeneral Sales Tax Act.
Which court decided this case, and when?
Kerala High Court, on 09 Jun 2008. The bench was A K BASHEER.
Precedent status how later indexed judgments have treated this case
No known negative treatment found in the Courts & Cases corpus.
This is a result about the indexed corpus, not a finding that the judgment remains good law. Coverage may be incomplete.