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O. P. Nos. 191 and 192 of 1960, decided on 25th February 1960.
Animals and 'birds in captivity‑Whether "goods" liable to tax‑Competence of Parliament to levy tax on sale of-- Central Sales‑Tax Act (LXXIV of 1956), S. 2 (d)‑Constitution of India, Article 366 (12).
Animals and birds in captivity (monkeys, minahs and parrots) are movable property and they are therefore "goods" as that word is defined in section 2 (d) of the Central Sales Tax Act, 1956.
Even if the sale of such things would not fall within Entry 54 of List II of the Seventh Schedule of the Constitution or Entry 92‑A of List I, it would fall within Entry 97 of List I and Parliament would be competent to levy a tax on such sales.
C. T. Peter, C. T. Joseph and T. C. Karunakaran for Petitioner.
There can be no doubt that animals and birds in captivity (monkeys, minahs and parrots in these cases) are movable property, and they are therefore "goods" as that word is defined in section 2 (d) of the Central Sales Tax Act, 1956. Hence the sale of such things is 'liable to taxation under that Act. The argument that animate things will not come within the definition of "goods" In Article 366 (12) of the Constitution does not carry the petitioners far even if it is well‑founded. Assuming it to be well‑founded, the sale of such things will not fall within Entry 54 of List II of the Seventh Schedule or Entry 92‑A of List I. It would therefore fall within Entry 97 of List I and to provide for the levy of a tax on such sales would be within the competence of Parliament.
I dismiss the petitions.
Petitions dismissed.
Tax Revision Cases Nos. 3, 4 and 5 of 1958, decided on 10th March, 1960.
Sale of Beedles‑-Purchase from manufacturers (who were exempted) and subsequent sale‑Whether liable to tax as first sales‑Ingredients necessary to attract provisions of S. S (vii), Madras General Sales Tax Act (IX of 1939).
Three ingredients are necessary to attract the provisions of section 5 (vii) of the Madras General Sales Tax Act, 1939. They are :‑(1) The sale should take place within the State of Madras ; (2) the sale should be by a dealer who is not exempted from taxation under section 3 (3), viz., whose turnover is not less than Rs. 10,000 and (3) the sale should be the first of such sales.
There cannot be several sales of the same commodity by the same dealer but there can be a series of sales of the same com modity by several dealers within the State of Madras. Some of these sales might be by dealers exempted from tax under section 3 (3) by reason of their turnovers being less than Rs. 10,000 and the others by dealers not thus exempted. subsection (vii) of section 5 makes the first of the latter category of sales liable to tax.
The assessees purchased beedies from manufacturers in the Madras State, whose turnovers were less than Rs. 10,000 and sold them later inside that State. The question was whether the assessees were not liable to tax on these sales under section 5 (vii) on the ground that they were not first sales but only second sales ;
Held, that as the manufacturers from whom the assessees pur chased the beedies were exempted under section 3 (3), the subsequent sales by the assessees were the first sales effected in the State of Madras by dealers not exempted under section 3 (3) and "hey were therefore liable to tax under section 5 (vii).
Sadhoo Beedi Depot, Beedi Marchants, Cannanore v. The State of Kerala (1960) 11 S T C 289 ref.
T. N. Subramania Iyer and S. Subramania Iyer for Petitioners.
The Government Pleader for Respondent.
.‑These three Tax Revision Cases arise out of a common judgment of the Kerala Sales Tax Appellate Tribunal, Trivandrum, and they raise the same question of interpretation of subsection (vii) of section 5 of the Madras General Sales Tax Act, 1939. The petitioners have been assessed to sales tax for the year 1955‑56, and the main question for decision in these cases is whether the sales of beedies by the petitioners in the Malabar area within the Madras State during the year were liable to tax under section 5 (vii). The revision petitioners purchased the beedies from manufacturers in the Malabar area, whose turnovers in the year were less than Rs. 10,000 and sold them later and the question, as we have already observed, is the liability to tax or otherwise of the petitioners on these subsequent sales. Sub section (vii) of section 5, omitting the words not essential for the purpose of the present cases, reads :‑
"The sale of . .. beedies . .. shall be liable to tax under section 3, sub‑section (1) only at the point of the first sale effect ed in the State of Madras by a dealer, who is not exempted from taxation under section 3, subsection (3) . . . . on his turn over."
The learned counsel for the petitioners urges that the sales involved in these cases are not liable to tax as they are not first sales of the beedies within the State of Madras According to him the sales by the manufacturers to the petitioners are the first sales and the sales by the petitioners which are taxed in these cases are only second sales and such second sales are not taxable. This argument was rejected by the Appellate Tribunal and has been reiterated before us.
An analysis of the subsection extracted above reveals that three ingredients are necessary to attract the provisions thereof to any sale. They are, firstly, that the sale should take place within the State of Madras ; secondly, that the sale should be by a dealer who is not exempted from taxation under section 3 (3) of the Act i.e., it should be by a dealer whose turnover is not less than Rs. 10,000 and lastly, that the sale should be the first of such sales. There cannot be several sales of the same commodity by the same dealer but there can be a series of sales of the same commodity by several dealers within the State of Madras. Some of these sales might be by dealers exempted from tax under section 3 (3) by reason of their turnovers being less than Rs. 10,000 and the others by dealers not thus exempted. Subsection (vii) of section 5 makes the first of the latter category of sales liable to tax and this has already been decided by us in another case, Sadhoo Beedi Depot, Beedi Merchants, Cannanore v. The State of Kerala ((1960) 11 S T C 289) T. R. C. No. 1 of 1958. In the cases before us the manufacturers from whom the petitioners purchased the beedies are exempted from taxation under section 3 (3); so that the subsequent sales by the petitioners are the first sales effected in the State of Vadras by dealers not exempted under section 3, sub section (3). Hence we hold against the petitioners on this point.
Another contention that has been urged before us is based on the definition of "turnover" in section 2 (i) of the Sales Tax Act. The relevant portion of this definition reads :‑
"Turnover" means the aggregate amount for which goods are either bought by or sold by a dealer. It is argued that the "turnover" contemplated by this definition is the aggregate of the purchases and also sales of a dealer and if these aggregates of the manufacturers were taken into consideration by the taxing authorities, the manufacturers of the beedies who sold them to the petitioners would not have been exempted under section 3 (3), as their turnovers would have exceeded Rs. 10,000. We would not express any opinion on the merits of this contention as it is not necessary, in our view, for the purposes of these cases. In the present cases there is no evidence or indication that even these aggregates of sales and purchases of the manufacturers of the beedies would have been more than the exemption limit of Rs. 10,000 under section 3 (3) and in view of that we disallow this contention.
Yet a third point has been raised before us in two of the cases, T. R. C. Nos. 3 and 5 of 1958. In these cases the Deputy Commercial Tax Officer had fixed the sale value of the beedies by adding ten percent. to the purchase value at which the petitioners purchased them from the manufacturers. The petitioners' learned counsel argues that this addition of such a high percentage of profits is unwarranted, arbitrary and illegal. This contention appears to have some force. But our powers of revision under section 12‑B of the Madras General Sales Tax Act are limited and confined to interference only on the ground that the Appellate Tribunal either decided erroneously or failed to decide any question of law. 1n the cases before us this question does not seem to have been raised before the Tribunal, so that the Tribunal had not decided the question, much less, erroneously. Nor can it be said that the Tribunal failed to decide the question, as the question had not even been raised before it. Hence we will not be justified in allowing this contention at this stage.
All the contentions raised by the petitioners' learned counsel having failed, we dismiss the revision petitions with costs, fixing the Advocate's fee at Rs. 50 in each case.
Petitions dismissed.
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