Reassessment and branded packed foods under Kerala sales tax law: packed ice-creams sold under a registered brand name were treated as taxable.

Section 19 of the Kerala General Sales Tax Act is described as permitting reassessment where turnover was originally assessed at too low a rate because of a mistaken understanding of the taxable character of the goods, including cases where the goods were sold under a registered trade mark. The commentary also states that item 25H(viii) of the First Schedule, before amendment, was broad enough to cover ice-creams sold in cups and ice-sticks sold in paper bags, treating such containers as packing and linking taxability to sale under a registered brand name. The disputed turnover was therefore assessed at the higher rate.

---

---

Issues: (i) Whether reassessment under section 19 of the Kerala General Sales Tax Act was valid for the first three assessment years. (ii) Whether ice-creams sold in cups and ice-sticks sold in paper bags fell within item 25H(viii) of the First Schedule to the Kerala General Sales Tax Act before its amendment.

Issue (i): Whether reassessment under section 19 of the Kerala General Sales Tax Act was valid for the first three assessment years.

Analysis: Section 19 authorises reopening of an assessment for any reason. Where goods had been assessed at too low a rate because of a mistaken understanding of their taxable character, reassessment could be initiated to bring the turnover to tax at the proper rate. The reassessment proceedings were initiated after it was found that the goods were sold under a registered trade mark.

Conclusion: The reassessment was valid and the objection to reopening failed.

Issue (ii): Whether ice-creams sold in cups and ice-sticks sold in paper bags fell within item 25H(viii) of the First Schedule to the Kerala General Sales Tax Act before its amendment.

Analysis: The expression used in the entry was broad enough to cover foods that are packed and sold under a registered brand name. The court treated cups, paper bags and similar outer coverings as forms of packing. Since the goods were marketed under a registered brand name and were sold in such packings, they answered the description in the entry.

Conclusion: Ice-creams sold in cups and ice-sticks sold in paper bags were taxable under item 25H(viii) of the First Schedule.

Final Conclusion: The tax revision failed in entirety, and the assessment of the disputed turnover under the higher rate was sustained.

---