TaxTMI 
TaxTMI 
2006 (3) TMI 320
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....d in these appeals is identical and hence they can be decided by a common judgment. We shall take the facts in Civil Appeal No. 6621 of 2000 for deciding the issue. The period involved is 1986-87 to 1993-94; the question is whether cotton based tarpaulin is exigible to sales tax under the Kerala General Sales Tax Act, 1963 ("the KGST Act"). Section 5 of the KGST Act is the charging section which provides for the incidence and levy of sales tax. Under section 5(1)(i) in the case of goods specified in the First or Second Schedule to the KGST Act, tax is leviable at the rates and only at the points specified against such goods in the said Schedules. In the case of goods not specified in the First or Second or Fourth or Fifth Sched....
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....e, "tarpaulin" falls under entry 100-C or 152, as the case may be, and is taxable at 8 per cent at the first point of sale from April 1, 1984 to March 31, 1992 and from April 1, 1992 it falls under entry 106 taxable at 10 per cent at the point of first sale in the State. The Third Schedule to the KGST Act contained entry 7, which read: "Cotton fabrics, woollen fabrics (sic) and rayon or artificial silk fabrics as defined in item Nos. 19, 21 and 22, respectively of the First Schedule to the Central Excises and Salt Act, 1944". At this juncture it may be pointed out that although the First Schedule to the Central Excises and Salt Act, 1944 was repealed in 1986, when the Central Excise Tariff Act, 1985 was brought into force, and the rel....
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....nder the ADEA, which would be shared with the States. Consistent with this basic philosophy, the Act specified under First Schedule the taxability of the commodities and provided under Second Schedule that the States which levy sales tax on the commodities would not be entitled to share in the additional duties collected for those commodities. Entry 52.06 of the First Schedule read: "Cotton fabrics (excluding fabrics covered under heading Nos. 52.09, 52.10 and 52.11),- . . . (b) subjected to the process of bleaching, mercerising, dyeing, printing, water-proofing, organdie processing or any other process or any two or more of these processes with the aid of power or steam." The case of the appellant-assessee is that tarpaulin may be manuf....
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....in" being the more specific entry as opposed to "cotton fabrics" which is the more general entry; it must be held to fall under the former in the First Schedule and hence be held to be exigible to sales tax under the KGST Act. Further, the Revenue contended that in view of the fact that "tarpaulin" was specifically included in entry 100C with effect from April 1, 1984, entry 152 with effect from July 1, 1987 and entry 106 with effect from April 1, 1992 in the First Schedule to the KGST Act, consequently, it never enjoyed exemption from exigibility to sales tax under the KGST Act from April 1, 1984. The contention is that during the relevant periods, First Schedule to the KGST Act was amended so as to make "tarpaulin" exigible to sales ta....
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....ent of the appellant by merely focusing on the general principle that when there are two taxing entries-one general and the other specific-then the specific entry would have to be given priority as compared to the general entry. In our view, this principle has no application in the facts of the present appeal as it was not a case of goods being exigible to tax under two entries. On the other hand, the appellant's case is one where the goods had been granted a special exemption provided they were already subjected to tax under the ADEA. The High Court fell into the error of assuming that the problem presented to it with regard to exemption could be solved by resort to the general principle of specific entry versus general entry of a taxable ....
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....s legal result would follow irrespective of whatever might have been the presumed intention of the Legislature in amending the First Schedule. The intention of the Legislature has to be gathered from the words used in the statute, and as long as entry 11 in the Third Schedule remains unamended, the legal result of exemption of cotton based tarpaulin from exigibility to sales tax to the KGST Act cannot be avoided. Further, admittedly, under the ADEA, additional duty is leviable on cotton based tarpaulin under the First Schedule to the aforesaid Act. Having regard to the objective behind enacting the ADEA, it is apparent that cotton based tarpaulin on which additional duty is levied under the ADEA was and continues to be exempt from sales ....