DEPB premium treated as taxable goods, not an actionable claim, under the Kerala General Sales Tax Act.

DEPB premium received on transfer of the entitlement was treated as taxable goods under the Kerala General Sales Tax Act, 1963 because the DEPB scrip carried a transferable market value and a commercially recognised property interest. Applying the principle that freely tradable licences and scrips treated as merchandise in commerce are goods, the court held that DEPB was not merely an actionable claim. The premium was therefore liable to sales tax under section 5, and the challenge to the assessment failed.

---

---

Issues: Whether duty entitlement pass book (DEPB) premium received on transfer of the entitlement was liable to be assessed to sales tax as goods under section 5 of the Kerala General Sales Tax Act, 1963, or was merely an actionable claim not exigible to tax.

Analysis: The DEPB scheme conferred a transferable monetary value capable of being bought and sold in the market. The entitlement was not confined to a right to receive money but represented a commercially recognised property interest with an inherent value of its own. Applying the principles that licences and transferable scrips which are freely tradable and treated in commerce as merchandise are goods, the Court held that DEPB had the character of goods and not of an actionable claim. The definition of goods under the Kerala General Sales Tax Act, 1963 was found to be consistent with that position.

Conclusion: DEPB premium was liable to be assessed to tax under section 5 of the Kerala General Sales Tax Act, 1963 and the challenge to the assessment failed.

---