The main legal point established is that the rubber cess paid by manufacturers forms part of the purchase turnover for tax assessment under the Kerala General Sales Tax Act, 1963.

1. The only question for decision in this batch of tax revision cases is as to whether rubber cess collected from the assessees who are all manufacturers of different rubber products is liable to be included in their purchase turnover of rubber for the purpose of assessment under the Kerala General Sales Tax Act, 1963. The respective assessing authorities have held that the rubber cess paid by the assessees forms part of their purchase turnover. The purchase turnover of rubber is exigible to tax under entry 38 of Schedule I of the Kerala General Sales Tax Act at the last purchase point. The Appellate Authority took the view that the rubber cess paid by the respective manufacturers of rubber products is not liable to be included in their purchase turnover and hence directed a fresh assessment deleting the cess. This view of the appellate authority is confirmed by the Sales Tax Appellate Tribunal in appeals filed at the instance of the Revenue. The State has come up in revision under S.41 of the Kerala General Sales Tax Act.

2. Rubber cess is payable under S.12 of the Rubber Act, 1947 (Central Act XXIV of 1947). S.12 as it originally stood is extracted below:

"Imposition of rubber cess. (1) With effect from such date as may be notified by the Central Government in this behalf, there shall be levied and collected as a cess for the purposes of this Act a duty of excise on all rubber produced in India at such rate not exceeding one anna per pound of rubber so produced as the Central Government may, by the same or a like notification, from time to time fix.

(2) The said duty of excise shall be payable by the owner of the estate on which the rubber is produced, and shall be paid by him to the Board within one month from the date on which be receives a notice of demand therefore from the Board.

(3) The said duty of excise may be recovered as if it were an arrear of land-revenue.

(4) For the purpose of enabling the Board to assess the amount of the duty of excise payable by the owner of an estate under this section

(a) the Board shall, by notification in the Gazette of India, fix the period in respect of which assessments shall be made, and

(b) without prejudice to the provisions of S.20, every owner of an estate shall furnish to the Board a return stating the total amount of rubber produced on the estate in each such period, not later than fifteen days after the expiry of the period to which the return relates:

Provided that in respect of an estate situated only partly in India, the owner shall in the said return show separately the amounts of rubber produced within and outside India.

(5) If any owner of an estate fails to furnish in due time the return referred to in subsection (4) or furnishes a return which the Board has reason to believe is incorrect or defective, the Board may assess the amount payable by that owner in such manner as may be prescribed.

(6) Any owner of an estate aggrieved by an assessment made under this section may within three months of the service of the notice under sub-section (2) apply to the District Judge for the cancellation or modification of the assessment, and the District Judge shall, after giving the Board an opportunity of being heard, pass such order (which shall be final) as he thinks proper.

(7) The proceeds of the duty of excise collected by the Board and any of the fees levied under this Act (all of which shall form part of the Consolidated Fund of India) reduced by the cost of collection as determined by the Central Government, shall, if Parliament by appropriation made by law in this behalf so provides, be paid to the Board for being utilised for the purposes of this Act."

S. 3(h) of the Rubber Act defines "rubber" to mean:

"(i) crude rubber, that is to say, rubber prepared from the leaves, bark or latex of any rubber plant;

(ii) the latex of any rubber plant, whether fluid or coagulated, in any stage of the treatment to which it is subjected during the process of conversion into rubber;

(iii)