State Bank of India vs State of Kerala

C.N. Ramachandran Nair, J.

1 Both the tax revision cases are filed by the same bank challenging the order of the Tribunal sustaining sales tax assessments on the sale of bullion to exporters for the years 1990-91 and 1991-92. The case of the petitioner is that the disputed quantity though delivered to exporters in the relevant year, was invoiced in the subsequent year after fixation of price. Therefore, according to the petitioner, sale of such quantity should be assessed in the succeeding year. However, the assessing officer estimated turnover in respect of full quantity delivered in the assessment year and assessed to tax. In the first appeal, the appellate authority though rejected the claim, directed acceptance of actual sale figures accounted in later year. This was confirmed by the Tribunal against which revisions are filed.

2 We have heard the learned Counsel for the petitioner and the learned Government Pleader.

3 The petitioner''s case is that though goods, namely, bullion was delivered to the exporters against receipt of substantial amount, the ultimate sale price is fixed later and only after fixing the price, invoice is raised, which happened in the subsequent year. We are unable to accept this contention because by delivery of goods against substantial payment received, the Bank has in fact effected "sale" as defined u/s 2(xxi) of the Kerala General Sales Tax Act, 1963. In fact, the purchasers are exporters and on taking delivery of the goods from the petitioners, the exporters were free to manufacture ornaments from the bullion purchased and could export/sell the same. Therefore, delivery of goods is pursuant to contract of sale and all what is left is only finalisation of price and raising of final invoice. Since the sale takes place on delivery of goods under terms of contract, the transaction is rightly assessed in the year in which delivery was given. These tax revision petitions are therefore dismissed.