Karthik Industries vs The Additional Commissioner of Commercial Taxes

A.S. Bopanna, J.—The assessee is before this Court in this appeal and the appeal was admitted to consider the following question of law:

Whether the Revisional Authority is legally correct in holding that Section 6(2) of the Central Sales Tax Act, 1956 is inapplicable to the case of the appellant-assessee?

In the light of the above, we have heard the learned Counsel for the parties and perused the order passed by the First Appellate Authority as also the order of the Revisional Authority. Though the First Appellate Authority had accepted the contention of the assessee that the provision u/s 6(2) of the Central Sales Tax Act (hereinafter referred to as ''the Act'' for short) would be applicable to the case of the assessee herein, the Revisional Authority has arrived at a conclusion that the same is not justified, but on the other hand has held that, the appropriate provision applicable to the case on hand would be Section 8(2) of the Act.

The learned Counsel for the assessee would contend that the goods in question is animal feed. Requirement of ''C'' Form admittedly is not required. In such circumstance it is contended that the lower rate of tax as provided u/s 6(2) of the Act at the rate of 2% would be applicable in the instant case.

The learned Government Advocate appearing on behalf of the revenue would point out that the fact relating to the inter-State sale is not in dispute. It is contended that the rate as provided in Section 8(2) of the Act is in respect of the goods other than the declared goods. It is further pointed out that Section 14 of the Act refers to the declared goods and animal feed is not a declared goods therein. In such circumstance it is pointed out that Section 8(2) of the Act provides for tax at the rate of 10% or the rate provided in the appropriate state would be applicable, but the higher of the two would have to be levied.

In the above background, a perusal of the order passed by the First Appellate Authority and the order passed by the Revisional Authority would disclose that both the authorities have referred to the provisions which were relevant for consideration, viz., Sections 6(2) and 8(2) of the Act. In that background a perusal of the reason assigned by the Revisional Authority would clearly disclose that in the circumstance where the goods are not covered by "C Form, the provisions contained in Section 8(2) of the Act would be applicable.

As already noticed from the instant facts, the animal feed which is the goods in question in the instant case is not a declared goods. In such circumstance the applicable provision would be Section 8(2) of the Act. If the rate as provided therein is taken into consideration, it should be either at the rate of 10% or at the rate applicable in the appropriate State, in case it is higher than 10%, which is provided therein. Admittedly in the instant case, in the State of Karnataka, the rate is lesser which is evident from the very contention put forth by the assessee that a lesser rate as provided u/s 6(2) is to be made applicable. If that be the position, the Revisional Authority was justified in arriving at a conclusion that the rate as provided in Section 8(2) at 10% would be applicable to the instant case. In that view, the question of law raised herein is answered against the assessee and in favour of the revenue. The appeal is disposed off accordingly.