Revisional power during pending appeal and tax treatment of rubber cess were clarified under sales tax law.

Section 35(2A) of the Kerala General Sales Tax Act was construed as an extraordinary revisional power that may be used on a point not actually decided in pending appellate proceedings, so long as it does not encroach on matters already in issue or likely to be decided by the appellate forum; on that basis, the revisional order was held within jurisdiction. On the tax issue, binding authority was applied to hold that rubber cess did not form part of the taxable purchase turnover as contended by the Revenue, so no tax was payable on that element. The dispute on the proper rate of tax on jute hessian was remitted for fresh consideration.

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Issues: (i) Whether the Deputy Commissioner could invoke revisional power under section 35(2A) of the Kerala General Sales Tax Act, 1963, when an appeal was pending on other points and the particular point had not been decided in that appeal; (ii) Whether tax was payable on the element of rubber cess included in the purchase of rubber.

Issue (i): Whether the Deputy Commissioner could invoke revisional power under section 35(2A) of the Kerala General Sales Tax Act, 1963, when an appeal was pending on other points and the particular point had not been decided in that appeal.

Analysis: Section 35(2A) was construed as conferring an extraordinary revisional power to prevent escape of tax on any point not actually decided in an appeal or revision. The pendency of an appeal, by itself, was held not to be an absolute bar if the point sought to be revised was not likely to be decided in that appeal. At the same time, the power could not be exercised so as to trench upon the appellate authority's jurisdiction where the point was already in issue or was likely to be decided by it. The provision was treated as overriding the restriction in section 35(2) only to the limited extent necessary to avoid merger on matters not considered by the appellate forum.

Conclusion: The revisional order was within jurisdiction and the assessee's objection on this ground failed.

Issue (ii): Whether tax was payable on the element of rubber cess included in the purchase of rubber.

Analysis: The point was covered by binding authority holding that rubber cess did not form part of the taxable purchase turnover in the manner contended by the Revenue. On that footing, the Tribunal's view on this item was supported by the governing legal position.

Conclusion: The assessee succeeded on this issue and no tax was payable on the rubber cess element.

Final Conclusion: The revision succeeded only in part. The Tribunal's jurisdictional objection was rejected, the decision on rubber cess was left undisturbed, and the question of the proper rate of tax on jute hessian was sent back for fresh consideration.

Ratio Decidendi: Under section 35(2A), revisional power may be exercised on a point not actually decided in pending or completed appellate proceedings, provided the exercise does not encroach upon a point that is in issue or likely to be decided by the appellate forum.

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