Purchase tax liability under Kerala sales tax law is confined to Fifth Schedule purchases, not form 18 concessional timber purchases.

Purchases of timber against form 18 under section 5(3) of the Kerala General Sales Tax Act, 1963 do not attract the special purchase tax liability under section 5(1)(v)(a). That liability is confined to purchases made after payment of tax under column (4) of the Fifth Schedule, where the dealer declares the goods for resale in the State through form 25A under rule 32(13C). A dealer who instead avails the concessional rate under section 5(3) through form 18 falls outside that limited scheme. The Commissioner's clarification extending section 5(1)(v)(a) to such purchases was contrary to the statutory structure and unsustainable.

---

---

Issues: Whether a dealer purchasing timber against form 18 and claiming concessional rate under section 5(3) of the Kerala General Sales Tax Act, 1963 is liable to pay tax on the purchase turnover under section 5(1)(v)(a), and whether the Commissioner's clarification to the contrary is sustainable.

Analysis: The rate structure under the Fifth Schedule distinguishes between the point of first sale to a registered dealer for resale, the subsequent sale, and sales or purchases not meant for resale. Section 5(1)(v)(a) operates in the limited situation where a registered dealer purchases goods on payment of tax under column (4) of the Fifth Schedule after declaring the purchase for resale in the State through form 25A under rule 32(13C) of the Kerala General Sales Tax Rules. The dealer in this case did not purchase timber under that route, but availed the concessional rate available under section 5(3) by issuing form 18 under rule 28. In such a case, the tax incidence under the Schedule is different, and the purchase does not attract the special liability under section 5(1)(v)(a). The clarification treating section 5(1)(v)(a) as applicable even to purchases covered by section 5(3) was therefore contrary to the statutory scheme.

Conclusion: Section 5(1)(v)(a) does not apply to purchases made against form 18 under section 5(3), and the Commissioner's clarification was correctly held unsustainable. The demand based on that provision was set aside in favour of the assessee.

Ratio Decidendi: The special liability under section 5(1)(v)(a) is confined to purchases made after payment of tax under column (4) of the Fifth Schedule and does not extend to purchases enjoying concessional treatment under section 5(3) on the strength of form 18.

---