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2011 Supreme(SC) 59
2011 (1) Supreme 340
SUPREME COURT OF INDIA
Dr. Mukundakam Sharma and Anil R. Dave, JJ.
M/s. Saraf Trading Corporation Etc. Etc. — Appellants
versus
State of Kerala — Respondent
Civil Appeal Nos.474-481 of 2011
[Arising out of SLP(C) Nos. 189-196 of 2008]
Decided on : 13-1-2011
IMPORTANT POINT
Section 44 of the KGST Act applies to dealer only.
Headnote:(a) Central Sales Tax Act, 1956 – Section 5(3) – There has to be an inextricable link between local sales or purchase with the export of goods for claiming exemption u/s 5(3). (Para 17)
(b) Interpretation of Statutes – In interpreting a taxing statute, equitable considerations are entirely out of place. (Para 25)
(c) Kerala General Sales Tax Act, 1963 – Section 44 – Provision being unambiguous, no proactive stance can be taken by the Supreme Court – Excess tax can be refunded only to the dealer and not to the purchaser who had actually paid the tax to the dealer while making the purchase. (Para 25)
Facts of the case:
Issues for consideration in this appeal include refund under Section 44 of the Kerala General Sales Tax Act, 1963 and exemption under Section 5(3) of the Central Sales Tax Act, 1956.
Finding of the Court:
There s no infirmity in the impugned judgment.
Result : Appeals dismissed.
JUDGMENT
Dr. Mukundakam Sharma, J.
1. Leave granted.
2. The issue that falls for consideration in the present appeals is whether the appellant/assessee would be entitled for refund of the tax which was paid by him to the seller, in view of the provisions of Section 44 of the Kerala General Sales Tax Act, 1963 (for short “the KGST Act”) . One additional issue which was urged at the time of hearing of the appeals and requires consideration by this Court is as to whether the appellant would at all be entitled to claim exemption under Section 5(3) of the Central Sales Tax Act, 1956 (for short “the CST Act”), as at the time of sale, the appellant could not allegedly show any evidence that it was the penultimate sale.
3. The aforesaid two issues have arisen for consideration in the light of the submissions made on the basic facts of these appeals which are hereinafter being set out:-
4. The appellants are exporters of tea. The appellants purchased tea from the tea planters directly in open auction and thereafter exported the same to foreign countries. The appellant being the exporter of the aforesaid consignment claimed for exemption on the ground that purchase was exempted under Section 5(3) of the CST Act. The said claim for exemption was found to be genuine by the Assessing Authority, and was allowed in full. The appellant also made a claim for refund of tax collected from them by the seller at the time of purchase of tea. The said claim was rejected by the Assessing authority and it was held that they cannot claim for refund under Section 44 of the KGST Act since they have not paid the tax to the Department but it was the sellers who have paid the tax and therefore under the provisions of Section 44 of the KGST Act, the refund that could be made is to the dealer only and the assessee being not a dealer no such refund could be made to the appellant/assessee.
5. Being aggrieved by the aforesaid order, the appellant filed an appeal before the Deputy Commissioner (Appeals) who considered the contentions of the appellant and upon going through the records found that there is an observation recorded by the assessing authority that the export sales is pursuant to the prior contract or prior order of the foreign buyers and also that export sales are supported by bill of lading, export invoices etc. The appellate authority also recorded the finding that the claim of exemption under Section 5(3) of the CST Act is envisaged for the penultimate sales or purchase preceding the sale or purchase occasioning the export. However with regard to the refund it was noted that the goods purchased are taxable at the sale point and hence the liability to pay tax is on the part of the seller. Accordingly, it was for the Seller to prove that the sales are effected to an exporter in pursuance of prior contract or prior orders of the foreign buyers.
6. It was held by the Appellate Authority that since, in the present case the aforesaid sellers namely the planters who sold tea to the appellant and on whom the burden lies to prove before the assessing authority that his sale is for fulfilling an agreement or order of the foreign buyer had not satisfied those conditions and had also not discharged his burden, therefore, there is no question of refund in the present case to the appellant as they are not entitled to any such refund under the provisions of Section 44 of the KGST Act.
7. The appeal was filed therefrom to the Kerala Sales Tax Appellate Tribunal, which after going through the records referred to the provisions of refund as contained in Section 44 of the KGST Act, which reads as follows:-
“44. Refunds:- (1) When an assessing authority finds, at the time of final assessment, that the dealer has paid tax in excess of what is due from him, it shall refund the excess to the dealer.
1. 2. When the assessing authority receives an order from any appellate or revisional authority to make refund of tax or penalty paid by a dealer it shall effect the refund.
2.
