TaxTMI 
TaxTMI 
1998 (1) TMI 433
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....he sales effected by the agents monthly. It is also stated that at the close of each financial year sometimes certain stocks of goods remain with the agents and the appellant pays sales tax on the purchase value of such stock in subsequent year as and when the stock is sold and the accounts of sales in respect thereof are received from the agents as the stock acquires the quality of last purchase only when the goods are sold. 3.. The final sales tax assessment of the appellant for the year 1987-88 was completed by an order dated November 30, 1989. While passing the assessment order the Sales Tax Officer disallowed the contention of the appellant that closing stock valued at Rs. 38,91,289.52 pending with the agents outside the State is liable to be excluded. Consequently, the appellant was sent a demand for Rs. 1,79,400 and surcharge of Rs. 11,953. Aggrieved, the appellant challenged the said order of assessment by means of a writ petition before the High Court of Kerala, but the same was dismissed and a writ appeal against the said decision of the learned single Judge preferred before the Division Bench of the High Court also came to be dismissed by the judgment under appeal. ....
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....h of the subsequent years until such goods are either sold by him in the State or such purchase acquires the character of last purchase in the State in the hands of such dealers and in case such purchase acquires the character of last purchase in the State in the hands of such dealer, the turnover in respect of such purchase shall be liable to tax in the year in which the purchase acquires the character of last purchase. This indicates that the goods which are liable to tax as a last purchase point and form the closing stock of a year, shall be shown in the subsequent year as a part of total turnover until they are sold and the goods acquire the quality of last purchase, exigible to tax. This explanation came to be interpreted by a Division Bench of Kerala High Court in the case of Deputy Commissioner of Sales Tax (Law), Board of Revenue (Taxes), Trivandrum v. Keveyam & Co. [1986] 63 STC 387. The High Court of Kerala interpreting the Explanation held, "that there should not be any distinction between the closing stock of the goods held by an assessee inside the State and outside the State as the goods sent to his agents outside the State on consignment basis still continued to be t....
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....t of imported and exported goods.-Where in the case of any goods tax is leviable at one point in a series of sales or purchases, such series shall,- (a) in the case of goods imported into the State either from outside the territory of India or from any other State in India, be deemed to commence at the stage of the sale or purchase effected immediately after the import of such goods; (b) in the case of goods exported out of the State to any place outside the territory of India or to any other State in India, be deemed to conclude at the stage of the sale or purchase effected immediately before the export of such goods." 8.. Learned counsel for the appellant urged that the purchases could not be brought to tax despite the amendment in Explanation. In other words, the argument is that the amendment by Act No. 6 of 1988 has not achieved the desired result of bringing to tax the closing stock of goods held outside the State as on 31st March. It is also urged that though the amendment made to Explanation to section 2(xxvi) is subject to the provisions of section 8, that section on its language is not sufficient to impute the time of attaining of quality of last purchase on the ....
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....in [1986] 63 STC 387 has held that the closing stock of goods held outside the State will not acquire the character of last purchase till it is sold. Under the cover of this decision, many dealers claim that their stock of goods held outside the State will not acquire the character of last purchase until the goods are sold and as such they are not liable to pay tax on such goods. As a result, Government is losing huge amount of tax. To overcome this situation Government decided to amend the Act suitably." 10.. Having regard to the phraseology and the objects of the amending Act extracted above, it is fairly clear that the amendment in Explanation to section 2(xxvi) was made with a view to alter the legal position that closing stock held outside the State will not acquire the character of last purchase till it is sold. Prior to passing of the amendment Act, non obstante clause occurring in the Explanation to section 2(xxvi) did not permit the application of section 8(b) of the Act, where the goods were exported outside the State, but after the amendment the width of non obstante clause in the Explanation was narrowed down as the Explanation to section 2(xxvi) has become subject t....