Purchase tax and residuary classification upheld where purchased goods were consumed in cooking and mineral water was not covered by beverages entry.

Purchase tax under section 5A was attracted where goods such as prawns, lobsters and groundnut were bought and then consumed in preparing cooked food, because they were not sold in the same form as purchased; the levy was upheld against the assessee. Mineral water was not covered by the beverages entry for the relevant assessment years, and the later specific entry for mineral water confirmed that it fell within the residuary entry; assessment on that basis was sustained. Section 5A also applied to consumption of goods, not merely manufacture, so the turnover assessed under that provision was valid and the revision failed in full.

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Issues: (i) Whether purchase tax was leviable on goods such as prawns, lobsters and groundnut purchased and thereafter cooked and sold as cooked food; (ii) whether mineral water fell within the entry for beverages or was assessable under the residuary entry for the relevant assessment years; (iii) whether turnover assessed under section 5A of the Kerala General Sales Tax Act, 1963 could be sustained.

Issue (i): Whether purchase tax was leviable on goods such as prawns, lobsters and groundnut purchased and thereafter cooked and sold as cooked food.

Analysis: The taxable goods were not sold in the same form in which they were purchased. They were consumed in the preparation of cooked food, and the levy of purchase tax was attracted where goods were consumed otherwise than by sale as such. The fact that the goods were later sold as cooked food did not take them outside the charging provision.

Conclusion: The issue was decided against the assessee and in favour of the Revenue.

Issue (ii): Whether mineral water fell within the entry for beverages or was assessable under the residuary entry for the relevant assessment years.

Analysis: Mineral water was held not to be covered by the ordinary meaning of beverage for the assessment years in question. The later specific inclusion of mineral water in a separate entry indicated that it was not already covered by the beverages entry for those years, and it was therefore liable to assessment under the residuary entry.

Conclusion: The issue was decided against the assessee and in favour of the Revenue.

Issue (iii): Whether turnover assessed under section 5A of the Kerala General Sales Tax Act, 1963 could be sustained.

Analysis: Section 5A applied not only to manufacture but also to consumption of goods. The assessee's reliance on authority dealing with the Income-tax Act did not displace the applicability of the sales tax provision. On the facts, the levy under section 5A was upheld.

Conclusion: The issue was decided against the assessee and in favour of the Revenue.

Final Conclusion: The revision failed in its entirety, and the assessment and levy were sustained.

Ratio Decidendi: Purchase tax under section 5A is attracted when purchased goods are consumed in preparing another taxable commodity or otherwise consumed, and an item not covered by a specific entry for the relevant period may fall within the residuary entry.

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