Retrospective tax entry cannot apply without proof that goods actually fit the taxing description for the relevant period

Tax on dressed chicken could not be sustained under retrospectively inserted Entry No. 114 for meat kept in cold storage because the department failed to prove the necessary factual basis for that classification during the relevant assessment year. The assessment and appellate orders were founded on an inspection made long after the year in question, and the authorities relied on inference rather than evidence that the goods actually answered the taxing entry. As the assessee consistently dealt in dressed chicken and the exemption position for that period remained applicable, the addition to assessable turnover was held unsustainable and the revision was dismissed in favour of the assessee.

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Issues: Whether sales of dressed chicken were liable to tax as meat kept in cold storage under the retrospectively inserted entry No. 114 to the First Schedule to the Kerala General Sales Tax Act, 1963, in the absence of factual material supporting such classification.

Analysis: The assessment and appellate orders proceeded on an assumption drawn from an inspection conducted long after the relevant assessment year, without establishing the necessary factual matrix for treating the goods as meat kept in cold storage. The assessee's consistent case was that it dealt in dressed chicken, which stood covered by the existing exemption position for the relevant assessment year. The retrospective insertion of entry No. 114 could not justify levy without evidence that the goods sold in the assessment year actually fell within that entry. The conclusion reached by the tax authorities rested on inference rather than proved facts.

Conclusion: The addition made to the assessable turnover was unsustainable, and the revision was dismissed in favour of the assessee.

Ratio Decidendi: A tax levy under a retrospective entry cannot be sustained unless the department establishes, by relevant factual material, that the goods assessed actually answer the description in the taxing entry for the relevant period.

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