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2013 DIGILAW 606 (KAR)

State of Karnataka v. Mruthyunjaya Traders

2013-05-30

B.S.INDRAKALA, D.V.SHYLENDRA KUMAR

body2013
ORDER 1. These revision petitions by the State under Section 23(1) of the Karnataka Sales Tax Act, 1957 (for short, 'the Act') are directed against the order dated 20-1-2011 passed by the Karnataka Appellate Tribunal, Bangalore in STA Nos. 1406 to 1408 of 2010, where under the Tribunal had allowed the appeals of the assessee and had set aside the order passed by the Lower Appellate Authority. These revision petitions have been presented raising the following substantial question of law. Assessee is a dealer engaged in the business of old newspaper or waste paper or raddi paper. The assessment years involved are 2000-2001 and 2001-2002. One appeal arose under Karnataka Sales Tax Act, 1957 and there were two appeals arising under the Central Sales Tax Act, 1956. Insofar as the present revision petitions are concerned the common substantial question of law is as to: Whether the old newspaper dealt with by the assessee are goods and if so, the liability on the part of the assessee is whether under both KST and CST? 2. Notice has been issued to the respondent-asses see. Respondent is served and represented by Mr. M. Thirumalesh. 3. Smt. S. Sujatha, learned AGA appears for the petitioner-State and Mr. M. Thirumalesh appears for the respondent-assessee. 4. It is submitted by the learned Additional Government Advocate that the question as to whether old newspapers is 'goods' or otherwise is now covered by an earlier judgment of a Division Bench of this Court rendered on 24-12-2010 in STRP Nos. 3 of 2009, 36 of 2007 and 39 of 2008 (United Agencies, Bangalore v. The Assistant Commissioner of Commercial Taxes, II Circle, BCD-III, Bangalore and Others 2012 (72) Kar. L.J. 182 (HC)(DB)) in common. 5. However, Mr. Tirumalesh, learned Counsel for the assessee points out that though the judgment is dated 24-12-2010, the decision of the Tribunal is dated 20-1-2011, but on the day when the Tribunal rendered the judgment, copy of the judgment of this Court was not available and it was not known and neither Counsel had brought it to the notice of the Tribunal the existence of such a judgment. While Mr. While Mr. Thirumalesh, learned Counsel appearing for the respondent, does not dispute this position, but points out this judgment covered the issue that the matter has been carried by other dealers on the very question and is now pending before the Supreme Court, more so, in the wake of the earlier decision of the Supreme Court in The Indian Express (Private) Limited v. State of Tamil Nadu 1988 (32) Kar. L.J. 7 (SC) : (1950-2004) 1 SCST 503 : (1987) 67 STC 474 (SC), wherein Supreme Court had opined that the question though had been considered on similar lines in subsequent case this Court had distinguished the decision of the Supreme Court in the case relied upon by the learned AGA and therefore, the assessee does not concede that the matter is covered, but the later judgment of the Supreme Court in the case of Salt Rikhaji Furtarnal and Another v State of Andhra Pradesh 2012 (72) Kar. L.J. 182 (HC) (DB), on the very question and being a later case and as per the view taken by the Full Bench of this Court, when there is conflict, the later decision of the Supreme Court has to be followed, but the Division Bench of this Court has distinguished the judgment of the Supreme Court in Salt Rikhaji's case and that is how the matter stands as of now. 6. Be that as it may, when an earlier Division Bench has already examined this question and has taken a view, unless this view is disagreed by another Division Bench by taking a contrary view and the matter is required to go before the Larger Bench, the earlier view of the Bench has to be followed. In view of the matter having already been seized before the Supreme Court in the other case and if the assessee cannot pursue the matter, we follow the earlier view taken by the Division Bench in the case of United Agencies, dated 24-12-2010 in STA No. 3 of 2009 and connected case. Therefore, we allow these revision petitions. The substantial question of law relating to the issue of 'goods' is answered in favour of the revenue in the sense-old newspaper is termed as 'goods', consequently the judgment of the Tribunal is set aside on this issue and the view of the lower authority that it is 'goods' is confirmed.