IMPORTANT POINT
There exists a distinction between the assessment under income tax and assessment under sales tax.

JUDGMENT

S.B. Sinha, J. —

1. Leave granted.

2. Appellant, Haleema Zubair, is an assessee under the Kerala General Sales Tax Act, 1963 (for short ‘the Act’). She is said to be the proprietress of two concerns, - one known as M/s. Tropical Traders and another M/s. Poseidon Food Company.

3. The said Topical Traders is a dealer in ceramic tiles. The business of M/s. Poseidon Food Company was to render services to various exporters as regards inspection and certification of quality of the items sought to be exported. The total turnover for the purpose of payment of sales tax was disclosed on the basis of the business carried out in the name of M/s. Tropical Traders. Whereas the taxable turnover was shown as 28,20,474.97, an addition of Rs.45,80,168.09 thereto was made by the Assessing Authority assessing a sum of Rs.3,58,87,960.97 by way of total turnover. The order of assessment proceeded on the basis that receipt shown as commission amounting to Rs.45,80,168.09 from M/s. Poseidon Food Company is not supported and proved by any documentary evidence. Appellant contended that the services so rendered is not a ‘sale’ and thus, the said order of assessment is wholly illegal and without jurisdiction.

4. An appeal was preferred thereagainst. Before the appellate authority the appellant produced income-tax returns, orders of assessments passed by the income-tax officer, orders placed by the exporters and the certificates granted by Marine Products Export Development Authority (MPEDA), Cochin.

5. By reason of an order dated 24th October, 2000 the first appellate authority upon noticing that the assessee had produced copies of the certificates issued by the MPEDA, Cochin and copies of letters issued by various parties requesting the appellant to inspect the goods to be exported, held that the professional services rendered to the exporters involving skill and knowledge did not constitute any ‘transfer of property’. It was held that the levy of tax on the receipt of commission for the sum of Rs.45,80,168.09 was not in order. The appellate authority for the purpose of assessment of tax reduced the additional income which was added by the taxing authority in the taxable turnover from 5 % to 2 = %.

6. Aggrieved by and dissatisfied therewith both the parties preferred appeals before the Sales Tax Appellate Tribunal in terms of Section 12 of the Act.

7. By an order dated 20th February, 2003, the Tribunal held as under :-

“We are afraid that the first appellate authority has not correctly understood the legal position involved. The observation of the first appellate authority that the sale for valuable consideration alone is exigible to tax does not appear to be correct. As per Section 5(1)(iii) of the KGST Act the consideration received in the case of transfer right to use any goods for any purpose is exigible to tax. We also notice that by a strange reasoning the first appellate authority shifted the burden of proof regarding the taxability of the disputed receipt to the assessing authority, contrary to the provisions of Section 12 of the KGST Act, as per which the burden of proving that any transaction of a dealer is not liable to tax shall lie on the dealer. We do not think that the assessee was able to discharge this burden of proof as enjoined under Section 12 of the KGST Act. From the available materials on record the first appellate authority was therefore, not justified in deleting the receipt of Rs.45,80,168/- from the turnover of the assessee. It follows that the order of the assessing authority in this regard as has also to be restored thereby allowing the State appeal to that extent.”

8. Revision petition filed thereagainst by the appellant has been dismissed by the High Court by its order dated 4th August, 2006, stating :-

“Even though Section does not provide a presumption that such unexplained amount represents sales turn over, we have no doubt in our mind that the Assessing Officer is free to consider what exactly is the nature