The main legal point established is the interpretation of 'sale' under the Kerala General Sales Tax Act, emphasizing the requirement of transfer of property in goods between separate entities for a transaction to be considered a sale.

T.L. VISWANATHA IYER, J.

This revision petition under section 41 of the Kerala General Sales Tax Act, 1963 (hereinafter "the Act") is by the assessee and relates to the assessment year 1979-80. Assessment was originally completed on the petitioner on 25th September, 1980. This order of assessment was reopened by the Deputy Commissioner of Agricultural Income-tax and Sales Tax, Kozhikode, in exercise of his powers under section 35 of the Act, by his order dated 3rd September, 1984, which was communicated to the assessee on 28th November, 1984. Thereby the matter was remitted back to the assessing authority for fresh disposal in the light of the observations made by the Deputy Commissioner.

2. Assessee is the Government Wood Workshop and Common Service Centre, Calicut. It is a unit owned by the Kerala State Small Industries Development and Employment Corporation Ltd. (hereinafter referred to as the SIDECO), which is a company wholly owned by the Government of Kerala. The petitioner-unit is engaged in the manufacture of furniture at Calicut. SIDECO has other units also. The petitioner-unit is registered as a dealer under the Act. During the assessment year in question the petitioner-unit had transferred to other units of SIDECO, furniture of the value of Rs. 1,60,746. It appears that the other units of SIDECO to whom the furniture was transferred, have also been separately registered as dealers under the Act. In making the original assessment on 25th September, 1980, the assessing authority did not impose tax on the value of the furniture so supplied to the other units of SIDECO. The Deputy Commissioner who set aside the assessment under section 35 was of the view that these other units to which the furniture was transferred were not "branches" of the petitioner inasmuch as the petitioner had paid only Rs. 10 towards renewal fee of its dealership registration certificate and had not paid any amount for "branch certificate renewal fee" for the other units, and therefore, the amount of Rs. 1,60,746 represented nothing but sales of furniture by the assessee to the other units and hence taxable.

3. The assessee had collected an amount of Rs. 1,60,464.97 from its customers to whom it had sold furniture as recoupment of excise duty paid by them. This amount was not treated as part of the assessable turnover by the assessing authority in his order of assessment dated 25th September, 1980. The Deputy Commissioner held that this amount was taxable in the assessee's hands and set aside the assessment to bring this amount also to tax in the hands of the petitioner.

4. The petitioner took up the matter in appeal to the Tribunal, where apart from the merits relating to the assessability or otherwise of the aforesaid amounts, a further contention was raised that the order under section 35 was "not valid or legally sustainable" as it had been communicated to the petitioner only on 28th November, 1984 after the expiry of the period of four years specified in section 35 of the Act. The Tribunal did not accept any of the contentions of the petitioner and dismissed the appeal. The assessee is in revision before us.

5. Counsel for the assessee, Mr. M. A. Manhu, has contended before us that the first items of turnover mentioned above was not liable to tax in the petitioner's hands, and that, in any case the order under section 35 passed by the Deputy Commissioner was barred by limitation.

6. It was the contention of the counsel that in order to enable an assessment under the Act, there should be sale of the furniture, which in turn implies the existence of a seller and a buyer. In this case, there was no such seller and buyer inasmuch as the furniture was transferred only from one unit of SIDECO to its other units. The fact that the other units were also registered separately under the Act was not such as to bring about a sale, when otherwise there was none such in law.

7. On the second point regarding the exigibility to tax of the amount of