The purchase turnover of petroleum products is taxable under Section 5A if certain conditions are met, clarifying distinctions between sales and exemptions.

1This batch of tax revision cases by the State of Kerala is against the common order of the Kerala Sales Tax Appellate Tribunal, Ernakulam in sales tax appeals by the assessee, the Indian Oil Corporation Ltd., Ernakulam, relating to its assessment for the assessment years 1970-71 to 1973-74. The main point urged by the Senior Government Pleader Shri T. Karunakaran Nambiar is against the finding of the Tribunal that the purchase turnover of petroleum products is not exigible to tax under S.5A of the Kerala General Sales Tax Act, 1963, for short the Act.

2The original assessment orders for the assessment years 1970-71 and 1971-72 brought to tax the purchase turnover of petroleum products purchased by the assessee from the Cochin Refineries Ltd. and despatched to depots outside the State for the purpose of sale. The assesses had no complaint against the inclusion of the purchase turnover and the tax assessed was duly paid. The assessing authority, after issue of notice of re-opening, passed orders of reassessment under S.19 of the Act on 24-1-1975 bringing to tax the purchase turnover of petroleum products exported to countries outside India omitted to be included in the original orders of assessment. The Appellate Authority confirmed the orders of re-assessment. The assessee appealed against these orders of the appellate authority to the Tribunal as T. A. Nos. 1190 and 1191 of 1975.

3For the year 1972-73 also the assessing authority had brought to tax the purchase turnover of petroleum products despatched to depots outside the State. The assessee had no dispute about the exigibility to tax on the purchase turnover. He had, however, disputed the taxability of the turnover relating to Asphalt exported to countries outside India There was also dispute relating to the rate of tax on the turnover of Naphtha sold by the assessee to the F. A. C. T. and also about the taxability of the purchase turnover of petrol consumed for own use. The assessing authority overruling the objections of the assessee brought to tax not merely the purchase turnover of petroleum products despatched to depots outside the State, but also the purchase turnover relating to petrol used for own consumption. The claim for concessional rate of tax on Naphtha sold by the assessee to the F. A. C. T. was not allowed. The purchase turnover of Asphalt was also brought to tax. In appeal at the instance of the assessee the appellate authority found that the assessee is entitled to the concessional rate of tax with respect to the sales turnover of Naphtha sold to the F. A. C. T. The contention that the purchase turnover of Asphalt exported outside India and of petrol used for own consumption is not exigible to tax was negatived. The assessee took up the matter in appeal to the Tribunal as T. A. No. 1093/1978.

4There was no dispute relating to the exigibility to tax on the purchase turnover of petroleum products despatched to depots outside the State during the year 1973-74 also. The points raised in the assessment proceedings for the year 1973-74 related to (1) the rate of tax on the sales turnover of Naphtha sold to the F. A. C. T., (2) the taxability of the sales turnover of crude oil imported by the assessee and sold to the Cochin Refineries Ltd., and (3) the exigibility to tax on the purchase turnover of petrol used for own consumption. The assessing authority did not accept any of the contentions of the assessee and an order of assessment was passed on 17-10-1977. In appeal the appellate authority allowed the concessional rate of tax with respect to sales turnover of crude oil imported and sold to Cochin Refineries Ltd. is not exigible to tax. The assessee was, however, held liable to tax on the purchase turnover of petrol used for own consumption. The assessee appealed to the Tribunal as T. A. No. 396/1978.

5The assessing authority after issue of notice to the assessee passed an order of re-assessment under S.19 of the Act for the period 1973-74 bringing to tax the purc