9911796707
TMI Blog2023 (7) TMI 1013X X X X Extracts X X X X X X X X Extracts X X X X ..... t of first sale and, therefore, the further sale by the appellant-assessee, did not fall within the mischief of Section 5(2) of the Kerala General Sales Tax Act (hereinafter referred to as "the KGST Act"). The essential facts are that Nilkamal Crates and Containers which owns the trade mark and brand "Nilkamal" by two different licensing arrangements (in this case an agreement entered into with - Kaveri on 6th December, 2001) had authorized the right to use the brand for the purpose of manufacture and sale of its products. Kaveri on 02.04.2001 entered into a Memorandum of Understanding with the present assessee (hereinafter referred to as "N.L."). Kaveri was selling the entire production of furniture to it (i.e. the assessee). The assessee is registered as a trading dealer under the KGST Act. Its return was accepted and its contention that since the entire production were sold by Kaveri to it constituted the first sale and since both Kaveri and the assessee were holders of the brand, the first sale for the purpose of Section 5(2) of the KGST Act was the one by which Kaveri sold the goods, was accepted. The revisional authority differed; and, exercising powers under Section 35 of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax and for goods coming under the Fifth Schedule, no tax specified for the first sale is payable, on which tax was levied in any earlier sales in the State: PROVIDED FURTHER that tax payable in respect of turnover of goods coming under the Second Schedule the transfer of which was effected without any processing or manufacture shall not exceed the rate and only at the points specified against such goods in the said Schedule. (v) in the case of goods specified in the Fifth Schedule at the rates and at the two points specified against such goods in the Schedule: PROVIDED that where there are no two points of sale in the State for any goods coming under the Fifth Schedule and the first sale is to a person other than a registered dealer, the rate specified in column (8) of that Schedule shall apply to such sales: PROVIDED FURTHER that the registered dealer effecting the last sale within the State to a person other than a registered dealer shall pay tax at the rates shown in column (6) or in column (8), as the case may be, of the Fifth Schedule irrespective of his turnover: PROVIDED ALSO that where a registered dealer, after purchasing the goods on payment of the tax me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In that judgment, the Court held as follows: 9. "In order to attract Section 5(2) of the Act, the following conditions are to be satisfied: (i) Sale of manufactured goods other than tea; (ii) Sale of the said goods is under a trade mark/brand name and; (iii) The sale is by the brand name holder or the trademark holder within the State. If the above three conditions are satisfied, the sale by the brand name holder or the trade mark holder shall be the first sale for the purpose of the Act. 10. The aforesaid sub-Section commences with a non-obstante clause, i.e., irrespective of Section 5(1) of the Act or any other provision under the Act. The said sub-Section speaks of a sale made by a brand name holder or the trade mark holder within the State. The Legislature deems that such a sale by the brand name holder or the trade mark holder shall be the first sale within the State. In our opinion this is the only possible construction that can be given to sub-Section(2) of Section 5 of the Act. Keeping in view the aforesaid provision, let us once again trace the transaction between the appellant and the licensee, namely, M/s. Bristo Foods Pvt. Ltd." Later in the judgment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vant period as it is proved beyond reasonable doubt that the appellant-Company is the brand name holder of "Sansui". We uphold the decisions rendered by the High Court in revision petition and review petition and no interference is warranted into it." In the present case, it is evident that both Kaveri and the assessee are authorized to use the trade mark and brand "Nilkamal" through separate arrangements. It appears that despite this fact, the present assessee is not engaged in manufacture of the goods in Kerala but is only selling them in that State. On the other hand Kaveri appears to be a manufacturer / dealer whose entire produce is sold to the assessee. In view of the categorical ruling of this Court in "Kail" there can be doubt that the sale to the assessee by Kaveri cannot be ignored by any stretch of the imagination - not in the least because Kaveri was an exempted unit at the relevant time. The fact that an exemption prevailed and enured in favour of a unit does not in any way detract from the circumstance that the levy subsists. This fundamental aspect appears to have been completely ignored by the High Court when it ruled that such sale had to be ignored altogether. ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
