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of <h1>Court directs reassessment of works contract turnover for plywood sales under Kerala Sales Tax Act</h1> The court set aside the orders of the appellate authorities and directed the assessing officer to reassess the turnover of works contracts involving the ... - Issues:Assessment of turnover of works contract involving sale of plywood at 2% or 12% under entry 12 of the Fifth Schedule to the Kerala General Sales Tax Act, 1963.Analysis:The judgment of the court, delivered by C.N. Ramachandran Nair J., addressed the issue of whether the turnover of works contract involving the sale of plywood should be assessed at 2% or 12% under entry 12 of the Fifth Schedule to the Kerala General Sales Tax Act, 1963. The respondent/assessees were engaged in interior decoration work that included the purchase of plywood, taxed at 10%. However, plywood is taxable at 2% at the last sale point under the Fifth Schedule. The assessing officer assessed the entire turnover at 12% under item 12 of the Fourth Schedule, a decision challenged by the respondents. The court noted that the claim of the respondents could not be allowed without considering each contract, the nature of work executed, and whether plywood was used in its original form or converted into other items. The taxable turnover exceeded the purchase turnover of plywood, indicating that the respondents could not claim a 2% tax rate on the entire turnover. The court emphasized that interior decoration work involves various taxable materials at different rates, and without proper accounts showing purchase, use, and closing stock, it was impossible to determine the taxable turnover attributable to plywood and other materials.The court found that neither the Tribunal nor the first appellate authority had considered the claim in light of purchase turnover, closing stock, and use of items in the work. No single contract had been analyzed by any authority. Consequently, the court set aside the orders passed by the appellate authorities and directed the assessing officer to revise the assessment upon the production of documents. The respondents were instructed to provide work orders, purchase bills, and other accounts for the reassessment. All issues were left open for the parties to raise before the officer with records. The sales tax revisions were disposed of, canceling the assessments modified by the appellate authorities, including the Tribunal.
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