9911796707
TMI Blog2011 (6) TMI 702X X X X Extracts X X X X X X X X Extracts X X X X ..... by several manufacturers of branded products to get the manufacture of the goods in brand name done by job-workers or small industrial units under licence and then arrange purchase of the same in Kerala at a price agreed upon between the parties and then market the same in the State as second sales on which the brand name holder will not be liable to pay tax. Under this arrangement, the tax paid on branded products on first sales by the job-workers to the brand name holders used to be at much below the market price leading to evasion of tax. In order to get over this problem, the Legislature introduced section 5(2) to the Act in the year 1998 providing for levy of sales tax on branded products at the point of sale by the brand name holder w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... private limited company. There is no dispute that the petitioner has every right to use the brand name "Elite" for the products manufactured or marketed by them. However, the petitioner's case is that the petitioner is not manufacturing breads and cakes in the brand name "Elite", and on the other hand, the goods are manufactured by two other companies in the very same group, i.e., M/s. Elite Bakers Pvt. Ltd. and M/s. Elite Breads Pvt. Ltd., which are co-owners of the same brand name "Elite". This is because the directors and shareholders of those companies are also co-owners of the registered brand name "Elite". The contention raised therefore is that since the manufacturers themselves are brand name holders their sales to the petitione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the second sale by the brand name holder which is the real sale to the market should be subjected to tax as deemed first sale as provided under section 5(2) of the Act. The scope of section 5(2) has to be considered keeping in mind the objective for which this section is enacted and it should be applied such a way as to achieve the objective and not to defeat it. We have already traced the purpose of the legislation as one to levy tax on the genuine wholesale price of the commodity which happens when the product is introduced to the market and not when inter-dealer sales are made between group concerns at prices which are not genuine or real but are fixed to suit the interests of the beneficiaries of the business concerns in the same group ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsequently reject the petitioner's challenge against the assessment confirmed by the Tribunal. The learned counsel for the petitioner brought to our notice the benefit of set-off available to the petitioner under rule 32(13B) of the Kerala General Sales Tax Rules, which provides for set-off of the tax collected and remitted by the first seller when second seller is assessed on sales under the brand name under section 5(2) of the Act. We feel the petitioner is entitled to the relief by way of credit and set-off of tax to the extent the petitioner produces evidence regarding collection and remittance of tax by the first sellers, i.e., the manufacturers of the goods from the petitioner, which are also companies within the same group. Su ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
