Tax classification cannot change mid-year without clear statutory authority; reclaimed rubber reclassification was set aside.

Reclaimed rubber had been treated as rubber until 31 October 1986 and was sought to be reclassified as a rubber product from 1 November 1986 for the same assessment year under the Kerala General Sales Tax Act, 1963. The court found no clear legal basis, statutory amendment, or valid reasoning supporting a mid-year change in classification based on a clarification under section 59A. In the absence of express statutory authority for split treatment within one assessment year, the reclassification could not be sustained. The treatment of reclaimed rubber as a rubber product from 1 November 1986 was therefore set aside in favour of the assessee.

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Issues: Whether reclaimed rubber could be treated as rubber product from 1 November 1986 for the assessment year 1986-87 under the Kerala General Sales Tax Act, 1963.

Analysis: Reclaimed rubber had been treated as rubber up to 31 October 1986 and, from 1 November 1986, it was sought to be treated as a rubber product on the basis of a clarification under section 59A of the Kerala General Sales Tax Act, 1963. The reasoning adopted below did not disclose the basis for changing the classification from that date, and no legislative amendment supporting such a change was shown. In the absence of a clear legal foundation for split treatment within the same assessment year, the classification could not be sustained.

Conclusion: The treatment of reclaimed rubber as a rubber product from 1 November 1986 was set aside, and the issue was decided in favour of the assessee.

Ratio Decidendi: A commodity cannot be subjected to a mid-year change in tax classification within the same assessment year unless the statute clearly authorises that result.

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